INFLATION is the worst tax on businesses and households. It impacts the lowest paid the most, and I support the Treasury and the Bank of England as they do what they can to bring inflation under control.
Putin’s evil invasion of Ukraine and a post-pandemic surge in demand have fuelled inflation. The Bank of England’s late and slow reaction to inflationary pressures and a strong jobs market have caused inflation to be worse for longer.
In order to tackle inflation, interest rates have been going up and this is now having a major impact on people who have got used to low interest mortgage deals and are having to reassess their household budgets and re-negotiate their mortgage at a higher interest rate. Interest rates are normalising after an unprecedented period of ultra-low rates but the shift upwards will have a serious impact on home-owners’ budgets. There has been a glimmer of hope that inflation is beginning to come under control but it is clear that there are some difficult economic challenges which we will need to confront through this year.
Many of you will be savers, and as chair of the House of Commons Treasury Select Committee, I have been keen to hold the high street banks to account on how slow they have been to pass on interest rate increases to their savings accounts. I always encourage people to shop around to get the best deal but I feel that banks should do much more to pass on better interest rates, much quicker, to their loyal customers.
Fair business banking is also a very important issue and I am keen to hear from local firms about the challenges that they face getting access to business finance. The Treasury Committee is also calling for evidence with hearings planned for the Autumn. Small business is the engine room of our economy, and I am eager to make sure that the right conditions are in place to help start-ups and new small business to grow and create jobs and prosperity across West Worcestershire.
