Interest rate rise increases the risk of recession, says TUC

16 Jun 2022 03:20 PM

Commenting to the decision by the Bank of England to raise interest rates by 0.25%, TUC head of economics Kate Bell said:

“Raising rates doesn’t help when the main inflation drivers are external, like global energy prices and pandemic interruptions to supply chains. And this rise increases the risk of a recession, which is a bigger danger for the economy and would be devastating for families and businesses.

“The government must play a much more active role supporting household incomes and wage growth to see families through the cost of living crisis. And we need a national plan to build UK resilience with independent energy supply and a revival of UK manufacturing so that we are less dependent on imports. Triggering a recession now will not help with that at all, it will only make things harder.”