The Speaker
Saturday, 18 May 2024 – 11:20
Rishi Sunak speaking in Dartford
Prime Minister Rishi Sunak speaking at IKEA in Dartford this week | Photo Credit: Simon Dawson / No 10 Downing Street (CC BY-NC-ND 2.0)

Week in Review: Interest rates rise again

In the UK

Interest rates hit 15-year high

The Bank of England raised interest rates to 5% this week as part of continued efforts to bring down the rate of inflation. The Bank of England has an inflation target of 2% set by the Government, though inflation remained at 8.7% last month in May. Inflation measures how much the price of goods and services has gone up compared to a year ago.

The rise in interest rates was agreed upon by the Bank of England’s Monetary Policy Committee in a meeting on Wednesday. Two members voted to maintain the rate at 4.5%, while a majority of 7 voted to increase the rate by 0.5% to 5%.

The rate rise is the 13th consecutive rise since December 2021 and takes the interest rate to its highest level since 2008. The news is likely to be concerning for millions of people who could be impacted by higher mortgage repayments. For savers, the higher interest rates should be favourable, though saving rates for some banks have remained relatively low over recent times despite the rises in inflation.

Politicians have been calling on banks this week to increase the savings rates offered to customers, while there have also been arguments by some parties for more support for households impacted by rate rises. Following a meeting at Downing Street on Friday, banks and building societies have agreed to offer more flexibility to mortgage holders.

Speaking to the BBC on Sunday, Prime Minister Rishi Sunak said: “I want people to be reassured that we’ve got to hold our nerve, stick to the plan and we will get through this.” Opposition parties have criticised the comments and called for more action to be taken.

More strikes announced

More strikes have been announced in the UK this week as unions continue the push for more pay and better conditions for workers facing the cost of living crisis.

The 20, 22 and 29 July will see strikes at 14 rail firms by the RMT union. Strikes have also been announced at some universities in June and July, on top of a marking boycott which is already meaning that some students may not be able to graduate on time or receive a mark for assessments.

The British Medical Association has announced a five-day walkout by junior doctors between Thursday 13 July and Tuesday 18 July, raising the prospect of further disruption.

It was also reported this week that Prime Minister Rishi Sunak could reject recommendations by pay review bodies to give public sector workers pay rises. The reports have sparked criticised by trade unions – the Government has said final decisions have not yet been made on the matter.

Further afield

Wagner mutiny

Much of the world watched on at the start of the weekend as the chief of the mercenary Wagner group Yevgeny Prigozhin appeared to launch a mutiny in Russia. The extraordinary events followed Prigozhin’s increasing criticism of Russia’s military leadership over recent times.

On Saturday, the Wagner group chief claimed his forces were in control of military sites in Rostov-on-Don, and for a period troops began to head towards Moscow. Emergency measures were put in place in Moscow as a result of the events.

Fighters returned to their bases on Saturday evening following mediation and it is understood that Prigozhin will move to Belarus.

Titan submersible incident

All crew and passengers onboard the missing Titan submersible were confirmed dead by the US Coast Guard this week, following international efforts to trace the vessel. Officials said that the vessel, which was due to be exploring the wreckage of the Titanic, suffered a ‘catastrophic implosion’.

The submersible went missing last Sunday and lost contact with the Polar Prince ship around 1 hour and 45 minutes into its dive down to the Titanic. Five people were on board the vessel when it imploded.

An investigation is underway to try to understand the cause of the incident.

Skip to content