# Bank of England’s inflation response ‘risks higher interest rates for longer’

- URL: https://talkfuse.com/story/bank-of-englands-inflation-response-risks-higher-interest-rates-for-longer/
- Published: 2026-11-11T00:01:23+00:00
- Updated: 2026-11-11T00:19:10+00:00
- Original publisher: The Guardian (publisher lean: Left)
- Original article: https://www.theguardian.com/business/2026/nov/11/bank-of-england-inflation-response-risks-higher-interest-rates-for-longer
- Topics: Business, Economy, Politics, UK, World

## Key points

- Niesr says the Bank’s rate rise was too timid.
- UK inflation is 3.5% and may exceed 4%.
- The thinktank warns rates may stay higher for longer.

## Summary

The National Institute of Economic and Social Research (Niesr) says the Bank of England’s recent interest rate rise was too cautious and could leave inflation above its 2% target until at least 2030. It warns that delayed action may make inflation more persistent and ultimately require higher rates for longer.

The Bank raised its rate from 3.75% to 4% last week, amid fuel costs pushed up by the war involving Iran; UK inflation is currently 3.5%. Niesr expects inflation to exceed 4% in the new year and forecasts UK growth of 1.6% this year, slowing to 0.9% in 2028. Its outlook assumes oil at $105 a barrel, while it also warns that deferred budget decisions could leave a £30bn hole in government finances if repeated next year.

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Summarised by TalkFuse (https://talkfuse.com/). Quote the original publisher for the reporting and link this page for the summary and discussion.