Pressure on the Bank of England to get serious about tackling historic high inflation intensified today after new figures revealed the cost of living hit the highest rate for three decades.
Economists slammed the Bank for fuelling the worst inflation cunch in a generation that is now threatening to plunge the UK into a recession.
Prices in Britain are now seven per cent higher than they were a year ago, the steepest increase since March 1992, according to the Office for National Statistics (ONS).
Threadneedle Street has been accused of stoking inflation by keeping the money taps flowing for too long.
Officials at the Bank have “ignored the monetary drivers of inflation for many years,” Julian Jessop, economics fellow at the Institute of Economic Affairs, said.
Members of the rate setting committee need “to get serious about returning interest rates to more sustainable levels and withdrawing more of the extraordinary monetary stimulus that has allowed inflation to take off,” Jessop added.
UK households are expected to slash spending in response to inflation eroding their living standards at the worst rate in 66 years.
The Office for Budget Responsibility (OBR), Britain’s official forecaster, cut its expectations for growth to 3.8 per cent from six per cent.
More to follow.
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