Rising interest rates is a key pillar of Trussonomics. Liz Truss herself has always stopped short of saying this explicitly, pointing fingers instead at the Bank of England for its failure to curb spiralling inflation. But the economists advising her have made clear, in no uncertain terms, that they think interest rates have been too low for too long.
Right from the start of her leadership campaign, Truss was far more vocal about her criticisms of the Bank; a point made even clearer once she entered No. 10 and her Chancellor Kwasi Kwarteng set up bi-weekly meetings with the Bank’s governor Andrew Bailey. With this new pressure being applied on the Bank, many thought it would make history today by implementing its first 0.75 percentage point increase since it gained independence.
Yet the Bank’s decision, announced at noon on Thursday, suggests the ‘pressure plan’ isn’t working as intended just yet. Rates were once again raised by 0.5
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