State of Play. 14 September 2023

Triple lock dilemma

The return of sustained higher inflation has triggered sharp increases in interest rates to cool demand. However, policymakers are faced with a combination of challenges that arguably will not be solved by just increasing the cost of borrowing. Rising prices have forced many employers to increase wages at their highest rate for more than a generation. Pensioners have also benefited from sharp rises in earnings due to the ‘Triple Lock’ introduced in 2010. Why is the current policy making matters worse for the Bank of England, and how might this affect future interest rate policy?

Simon Durling, Santander Asset Management UK’s senior investment specialist shares his thoughts in this week’s State of Play.

SAM UK – State of Play -  14 September 2023