The Bank of England has warned of higher interest rates than expected next month in a bid to tackle inflation.
Speaking in Washington this morning, the Bank of England governor Andrew Bailey said: “As things stand today, my best guess is that inflationary pressures will require a stronger response than we perhaps thought in August.”
He added that the Bank “will not hesitate” to raise interest rates to curb inflation.”
It comes as new chancellor Jeremy Hunt said to expect a “full budget” at the end of this month, as he signalled tax rises and spending cuts to follow Liz Truss’s disastrous handling of the economy in her starting weeks as prime minister.
This morning Mr Hunt gave an extraordinary series of interviews in which he indicated a decisive break with his new boss’s plan for growth.
He admitted Ms Truss made “mistakes” and said “difficult decisions” were going to have to be taken to reassure markets and restore stability.
The medium-term fiscal plan on 31 October will now “pretty much” be delivering a “full budget”, he said.
