Britons will have to get used to higher interest rates, an independent Christian economist has warned, but prices will begin to stabilise. That's according to Bridget Rosewell, a former Chief Economic Advisor to the Greater London Authority.
“I'm expecting the economy to be in an uncomfortable place and we shouldn't lose sight of the long term, in the short term”, Rosewell told Premier Christian Radio.
The Bank of England has raised interest rates for the 12th time in a row and predicts inflation in the UK is expected to fall slower than previously thought as food prices remain stubbornly high.
“Interest rates actually take quite a while to feed through into prices”, commented Bridget, saying she expected more stable prices to “eventually come through”.
“Of course food prices in particular have been hit by a number of other things, not just interest rate rises, there's been the supply side shocks and war [in Ukraine] and so on”, she continued.
As part of efforts to bring inflation under control, the Bank increased rates by a quarter of one percent to 4.5 percent. But it was more glowing on prospects for economic growth, projecting the UK would manage to avoid a recession and raising its forecasts by the most in 26 years.
Ms Rosewell said the near-zero rates seen in past years were now at an end. “I think we're all going to have to get used to higher interest rates, which were actually in the past quite normal”, she said.
People with mortgages should expect their interest payments to rise, Bridget Rosewell warned, saying, "however painful... don’t put your head in the sand and believe that somehow this is all going to go away”.
“This is actually quite important for all of us, not to over-extend yourself, not to take out loans when you're not sure how you going to be able to repay them, and not to think that you have to have everything that everybody else has got”, she added.
A former Commissioner with the independent National Infrastructure Commission, Ms Rosewell said there was a need “to continue to push for net-zero investments and being more careful about the energy that we use”, because, “the planet depends upon it”.
Addressing what she called the “bigger picture”, Bridget Rosewell urged Christians “to think more broadly than our short term and individual interests”.
“That can be hard at the moment”, she added. “And we need to think about our communities and our families. But we do have to think about this, our society and our planet as well”.
