Higher interest rates could deepen UK recession, warns BoE rate-setter 

In an interview with the Observer, published on Saturday (3 December) Swati Dhingra said Britain’s economy is heading for “a lengthy and painful” recession, while Brexit is making matters worse.  

Dhingra added that an “optimal stopping point” is approaching, and investors may be getting ahead of themselves with the 4.5% rates forecast for next year. 

Notably, in her first two votes as a member of the MPC, Dhingra took a cautious approach and voted against rate increases. With most of her colleagues supporting the 75 basis-point rise to three percent that took place last month, Dhingra instead voted for a 0.5% rate increase.  

Dhingra told the Observer: "You do see a much deeper and a longer recession with rates being much higher"  

"That is what I think we should all be worried about ... are we going to end up lengthening and deepening the recession if the tightening continues at the pace it is?"