Ashley Webb, UK economist at Capital Economics, said the MPC should have communicated the need to make borrowing for companies and households more expensive rather than urging people not to ask for pay rises or seek to defend profit margins.
“Since the bank started to raise interest rates from 0.1 per cent in December 2021 to 4.25 per cent now, it’s consistently warned that rates wouldn’t rise very far. If the bank had sounded more hawkish, perhaps price and wage expectations may have declined further,” [s]he said.