8th June 2026
UK interest rates are far too high, and the Bank of England is making a serious mistake by keeping them that way.
Mortgage holders are paying more, renters are facing rising housing costs, businesses are struggling to invest, and public services are under increasing pressure. Jobs are at risk.
The Bank insists that high interest rates are needed to control inflation, but does the evidence actually support that claim?
In this video, I look at almost a century of UK economic history and examine what happened to real interest rates during every major period of economic stress, from the Great Depression of the 1930s, through the Second World War and post-war reconstruction, to the crises of the 1970s and the financial crash of 2008.
The pattern is remarkably consistent. When the economy is under strain, governments have usually allowed negative real interest rates because they reduce pressure on households, support investment, make government finances easier to manage and help economic recovery.
Today, however, the Bank of England is doing the opposite. Despite ongoing economic weakness, a cost-of-living crisis, stagnant growth, unaffordable housing and rising business pressures, it has deliberately pushed real interest rates back into positive territory. The result is a transfer of income from borrowers to lenders and from ordinary households to those who already own substantial financial assets.
I explain why high interest rates cannot solve supply-driven inflation caused by energy costs, disrupted supply chains and geopolitical shocks.
I also discuss the role of Rachel Reeves and the government, why this policy choice matters, who gains from it, who loses, and why Britain may be heading towards a deeper recession than necessary if current policies continue.
If you have a mortgage, pay rent, run a business, work in a public service, or simply want to understand what is happening to the UK economy, this is a discussion that matters to you.