Britain’s Treasury chief said he would be prepared to see the U.K. economy slip back into recession if further interest rate hikes are necessary to bring down inflation.
With the Bank of England expected to keep raising rates following higher-than-anticipated inflation figures this week, Jeremy Hunt said it was necessary to prioritize measures to slow the pace of price increases.
In an interview with Sky News that aired Friday, Hunt said the “only path to sustainable growth” is to bring inflation under control.
Asked if he was comfortable with further rate hikes even if it could precipitate a recession, Hunt said, “Yes, because in the end, inflation is a source of instability. … It is not a trade-off between tackling inflation and recession.”
Like other central banks, the Bank of England has been raising interest rates aggressively over the past 18 months or so to a 15-year high of 4.5% after inflation spiked sharply, first because of bottlenecks caused by the coronavirus pandemic and then Russia’s invasion of Ukraine, which caused energy and food prices to surge.
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