London Daily

Focus on the big picture.
Thursday, Apr 02, 2026

Bank of England chief says it never feels good to raise rates - but it is their job

Bank of England chief says it never feels good to raise rates - but it is their job

It's critical the Bank of England takes action on rates, the governor of the Bank of England tells Ed Conway.

The head of the Bank of England - responsible for the rise in interest rates - has said it never feels good for central bankers to raise rates but it is their job.

Asked how it feels to be doling out the medicine of interest rate rises, in an effort to reduce inflation, Andrew Bailey said it never feels good for central bankers.

"I don't think anyone should think that central bankers in any sense feel good doing this. But it's our job."

Speaking to Sky News data and economics editor Ed Conway, Mr Bailey said he was doing so to bring down inflation, and that if actions weren't taken, things would get worse.

"Much bigger" job losses could result, he said, explaining that it was critical the Bank takes action.

"I'm afraid if we get into that situation, the action that will have to be taken thereafter to restore stability would be much larger and much more damaging. It's so critical that we take action. So the pain is necessary to prevent something worse."

He denied accusations that the rate rises are bringing about a recession, saying such a statement was unfair. Instead, Mr Bailey placed the blame on economics shocks, the war in Ukraine and high gas and goods prices.

"I don't think it's correct to say that we are precipitating recession. Unfortunately, the UK, along with other countries, particularly European countries, has been hit by a huge shock to national real income. And that huge shock of course, is really to do with the war in Ukraine. And the huge impact it's having on the energy prices, particularly gas prices".

For mortgage holders whose rates have risen the governor said the market rates are too high. More mortgage products should return to the market, he added.

There is some further good news for fixed mortgage holders.

Fixed rate borrowers and been impacted by rates rising "very, very substantially", Mr Bailey said, in the second half of September

"I think the good news is those market prices are now restoring stability. They're coming back down to where they were earlier in September. And that should feed through into the mortgage market."

The number of mortgages on the market has fallen since the mini-budget as the Bank of England reacted and signalled it would increase interest rates to curb inflation. The Bank's statements caused uncertainty among lenders over how much rates would increase and when.

Mr Bailey's comments come after the Bank unveiled the biggest interest rate hike for three decades. It raised the base rate of interest by 0.75 percentage points to 3% and said that the UK is already in recession.

It warned that the UK could face a protracted contraction in the coming years, with high inflation and the unemployment rate climbing to 6.5% - the highest since the financial crisis.

The length of this forecasted recession - eight successive quarters in which gross domestic product shrinks - would make it the most protracted since comparable records began but less deep than most previous downturns, including during the financial crash and the 1980s.

Newsletter

Related Articles

0:00
0:00
Close
King Charles III Invited to Address Joint Session of U.S. Congress in Rare Diplomatic Honor
Debate Grows Over Whether Expanded North Sea Drilling Can Reduce UK Energy Bills
UK Faces Heightened Risk of Jet Fuel Shortages, Airline Chief Warns
UK Ends Police Investigations into Lawful Social Media Posts After Review Finds Overreach
Abramovich Moves to Establish Charity for Frozen Chelsea Sale Proceeds Amid UK Dispute
Starmer Reaffirms NATO Commitment While Responding to Trump’s Strategic Critique
UK Aid Reductions Raise Fears of Severe Human Impact Across Parts of Africa
UK Signals Renewed Push for EU Cooperation as Iran Conflict Reshapes Security Landscape
Bank of England Signals Caution as Bailey Advises Markets Against Expecting Rate Hikes
UK to Convene Global Coalition to Restore Shipping Through Strait of Hormuz
Trump Signals Possible NATO Reassessment, Emphasizes Stronger U.S. Strategic Autonomy
Australia Joins British-Led Efforts to Reopen Strait of Hormuz Amid Escalating Tensions
King Charles Plans US State Visit as UK Strengthens Ties with Trump Leadership
UK Regulator Launches Investigation Into Microsoft’s Business Software Practices
Kanye West Set for High-Profile Return to UK Stage at Wireless Festival
Trump Presses Europe to Strengthen Commitment as Iran Conflict Escalates
UK to Deploy Additional Troops to Middle East Amid Rising Regional Tensions
UK Authorities Face Claims of Heavy-Handed Measures in Monitoring Released Pro-Palestine Activists
Trump Calls on UK to Secure Its Own Energy as Iran Conflict Intensifies
Nigel Farage Declines Invitation to UK Conservative Conference Led by Liz Truss
Trump Warns Allies to Take Responsibility as Rift Deepens with UK and France Over Iran Conflict
How Britain’s Prime Minister Controls U.S. Bomber Access in Escalating Iran Conflict
Trump Urges Allies to Secure Their Own Oil Supplies as Hormuz Crisis Disrupts Global Energy
Russia Expels British Diplomat as UK Pushes Back Against Pressure
White House App Faces Scrutiny After Claims of Continuous User Location Tracking
BBC Faces Scrutiny Over Allegations of Paid Content Linked to Saudi Arabia
UK-France Coastal Patrol Agreement Nears Breakdown Amid Migration Pressures
UK Police Detain Pro-Palestine Activist Again Weeks After Bail Release
FTSE 100 Advances as Energy and Mining Shares Gain Amid Middle East Tensions
Eli Lilly Seeks UK Pricing Deal to Unlock Renewed Pharmaceutical Investment
Three Arrested in UK After Massive Cocaine Haul Discovered Hidden in Banana Shipment
UK Fuel Prices Poised for Further Surge Amid Global Energy Pressures
Apple Subsidiary Penalized by UK Authorities for Breach of Moscow Sanctions
Western Allies Intensify Coordinated Sanctions Strategy Against Russia
UK Lawmakers Face Criticism Over Renewed Push for Social Media Restrictions
Starmer Signals UK Crackdown on Addictive Social Media Features
Rising Costs Push One in Five UK Hospitality Businesses to the Brink of Closure
Man Arrested on Suspicion of Attempted Murder After Car Strikes Pedestrians in UK, Injuring Seven
Escalating Conflict Involving Iran Tightens Fiscal Pressures and Highlights UK Economic Vulnerabilities
UK Moves to Confront Russian ‘Shadow Fleet’ Operating in Its Waters
UK Housing Divide Deepens as Older Owners Hold Wealth While Under-30s Face Mounting Barriers
London Demonstration Calls on UK to Recognize Iranian Opposition’s Provisional Government
UK Green Party Vote on ‘Zionism is Racism’ Motion Collapses Amid Internal Disputes and Technical Failures
SNL UK Ignites Debate with Sharp Royal Satire Targeting Prince Andrew and Prince William
EU Proposes ‘Emergency Brake’ to Resolve Deadlock in UK Youth Mobility Talks
Thousands Rally in London to Oppose Rise of Far-Right Movements
Hong Kong Official Rejects Allegations of Surveillance Orders Targeting UK-Based Dissidents
PayPal Expands Cryptocurrency Services to Allow UK Users to Buy and Sell Bitcoin
UK Minister Challenges Reform Party’s ‘Pro-Family’ Agenda as Debate Intensifies
Concerns Grow Over Meningitis Risk Among UK Students Amid Warning Signs of New Outbreaks
×