Head of Economics at the New Economics Foundation, Alfie Stirling, responded to the announced increase in interest rates:

The Bank of England won’t like to admit it, but it is caught between a rock and a hard place. Had it not raised rates today, it would have increased the risks of unsustainable household borrowing and increasingly dangerous asset bubbles.

But the Bank also knows that starting to raise rates when the economy is so weak risks locking in the UK’s low pay, low productivity trajectory – wasting economic resources and the chance for better living standards along the way.

Today’s rate rise was a decision the Bank should never have been forced to make. When the economy is underperforming, government should be increasing public spending to get things moving again, not forcing individual families to do it themselves by going beyond their means. Until the Treasury does this, the Bank of England will continue to endure the same catch-22 every couple of months.”