The head of the Family Building Society has labelled the prospect of a 14th Bank of England base rate rise in a row this week as “an act of insanity”.
Economists are divided on the course the central bank’s rate-setting Monetary Policy Committee will take at Thursday’s meeting.
Some forecast it will continue to raise rates by 0.25%, or perhaps 0.50%, in the face of rising wage settlements — while others predict the committee will pause to study the effect of higher mortgage rates and falling house prices.
The BoE has raised the base rate 13 times consecutively since December 2021 from 0.10% to currently stand at 5%, as it bids to combat inflation, which sits at 7.9%.
The country’s inflation rate is almost four times above the Bank’s 2% target.
But Family Building Society chief executive Mark Bogard says: “I suspect that historians will look back at all these mini rate rises as an act of insanity.
“Once rates needed to rise, the steps should have been larger but fewer of them. Then they need time to see if they are achieving the desired result.
“What can you really learn every six weeks?”
Bogard urges the Monetary Policy Committee to hold the base rate steady on Thursday “and see where we are in six months”.
The Monetary Policy Committee’s decision will be announced at noon on Thursday.
