Watch: Top Bank of England economists face questions on interest rate increases

The Bank of England’s top economists faced questions on interest rates on Tuesday, 23 May.

Governor Andrew Bailey appeared before parliament’s Treasury Committee alongside the central bank’s chief economist Huw Pill and its Monetary Policy Committee members Catherine Mann.

The economists were questioned over the bank’s decision to increase interest rates for the 12th time in a row earlier in May to its highest level in 15 years at 4.5 per cent.

It come weeks after Mr Pill said that British households and businesses “need to accept” they are worse off and stop asking for pay increases and pushing prices up.

“So somehow in the UK, someone needs to accept that they’re worse off and stop trying to maintain their real spending power by bidding up prices, whether higher wages or passing the energy costs through on to customers,” he told a Columbia law school podcast.

In a statement shared at the time of the latest raise, the Bank of England said it was raising rates because inflation was too high - 10 per cent instead of its targer 2 per cent - and it was the best way to try and bring down inflation.

The rate of inflation has increased in part due to rising food prices.

Moreover, many homeowners now face the prospect of higher monthly mortgage payments - the Bank of England estimated that up to four million households would be affected.

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