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June 16, 2022

The recession we have to have

The recession we have to have

Can the Bank of England curb inflation without pushing us into a recession?


Today the Bank of England lifted interest rates again, for the fifth time in a row. Earlier this week interest rates in the US were raised by 0.75%, with much to follow. The reason for the hikes? It’s because inflation is shooting up, largely because of supply chain problems resulting from the war in Ukraine and COVID lockdowns in China. We’re also seeing a shortage of people to fill jobs, giving more people the opportunity to push for higher wages. How will raising interest rates fix those problems? Today Phil and Roger get Kallum Pickering, Senior Economist at Berenberg Bank in London, to explain how he sees monetary policy working in today’s unique set of circumstances. Is a recession an inevitable consequence? In fact, is it necessary if we are to curb inflation? To paraphrase Paul Keating, the Australian Prime Minister in the late nineties, is this going to be the recession we have to have?


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Kallum PIckering Profile Photo

Kallum PIckering

Senior economist, Berenberg

Kallum Pickering is a senior economist at Berenberg. He leads on UK macroeconomic analysis and covers global economic issues. He joined them in 2015 from BNP Paribas, where he worked as an economist focusing on UK, Ireland and Nordic macro and real estate. Kallum regularly contributes to the public debate through interviews on Bloomberg, CNBC, the BBC and CNN. And now The Why? Curve! He writes a regular column for The Telegraph and has written for The Evening Standard and City AM. He holds an MSc in Economics from The University of Warwick and a BA in Economics from The University of Sheffield.