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In this case it was widely publicised that interest rates went up to try to bring inflation down (which was significantly above the 2% target). Growth was weak
by captainbland 1y ago
In this case it was widely publicised that interest rates went up to try to bring inflation down (which was significantly above the 2% target).
Growth was weak to unremarkable although the hiring market was good for job seekers at the time shortly before the interest rises were introduced.
- eru 1y agoYes, if you bring in more context interest rates can be enlightening. But by themselves they are almost useless information.
- Analemma_ 1y agoGrowth in the US, and Europe to a lesser degree, was very strong in this period, so it was natural that their interest rates went up. And when interest rates go up in the UK's two primary trading partners, it doesn't really have any choice but to hike rates with them, lest people flee the pound and make inflation even worse. It was unfortunate that this had to happen in a weak growth regime, but the British economy is such a boondoggle at the moment I don't think the alternative would've been any better.
- eru 1y agoAlas, it would be better if the Bank of England had a nominal GDP level target, and then they could let inflation, exchange rate and interest rates be what they may in order to reach the nominal spending target.