Mortgage and financial experts have expressed serious concerns over the state of the economy and the Bank of England’s recent policy decisions.
Earlier this morning the ONS released GDP figures showing that the economy grew by an unexpected 0.2%, but experts claim growth could be higher.
Stephen Perkins, managing director at Yellow Brick Mortgages, criticised the perceived failures of the economy, highlighting the struggles that many businesses and individuals are facing. He pointed to higher interest rates, increased business costs, and less disposable income for the general public as factors limiting economic growth.
“Higher interest rates, higher business costs, and the general public having less freely available cash to spend on goods and services are reducing the growth potential of the economy,” Perkins stated. He accused the Bank of England of making misguided decisions that have hindered economic progress, likening the central bank’s actions to a “throw the UK economy into a recession” relay race.
Samuel Mather-Holgate, an independent financial advisor at Mather and Murray Financial, described the economy as being in limbo. He expressed particular concern over the central bank’s interest rate policy, citing rising costs for businesses and a continued squeeze on consumers.
“With inflation falling away, the central bank interest rate policy is what is most concerning. We are seeing business financing costs go through the roof, and this is on loans that were meant to help us, taken out with government backing during the pandemic. The Bank of England needs to reverse its rate course, and soon, to prevent a catastrophic recession,” warned Mather-Holgate.
Rhys Schofield, brand director at Peak Mortgages and Protection, suggested that the problem lay more with the Bank of England’s oversight rather than the economy itself. He argued against further rate rises, stating that they would only serve to paralyse the housing market by making new mortgages more expensive.
Schofield also drew attention to measures implemented in Spain to combat inflation and economic challenges, such as energy price caps, lower public transport costs, and rent controls. “There isn’t any reason the UK couldn’t have done that,” he asserted.
