It has been interesting indeed to watch the developing debate around interest rates in recent months.

“Debate” is perhaps a bit of a euphemism these days. We have seen protests outside the Bank of England over the raft of increases in rates implemented by the Old Lady of Threadneedle Street.

Coming after such a long period in which the setting of interest rates was non-contentious - even if quantitative easing was more controversial particularly in terms of perceptions of who gained from this and who did not and the potential impact on inflation – current sharp differences of opinion seem particularly stark.

The Bank of England has hiked UK base rates from a record low of 0.1% in December 2021 to 5.25%.

Interest rates, even though the Bank has independence in setting benchmark borrowing costs, have perhaps naturally become far more of a political hot potato in recent months.

The Tories have clearly fuelled inflation with their hard Brexit folly. So it is easy to understand why some people might feel aggrieved that they are having to pay the price for this incompetence through rises in interest rates that the Bank of England’s Monetary Policy Committee thinks are necessary to control inflation. While global factors have fuelled UK inflation, Brexit has been a major contributory cause.

Of course, the Bank of England is now finding itself the subject of public ire, amid significant differences of opinion over its policymaking.

Danny Blanchflower, a former member of the MPC who is Bruce V. Rauner ’78 professor of economics at Dartmouth College in the US and a visiting professor at the University of Glasgow, seemed truly exasperated with the MPC’s decisions on rates when he visited Scotland in June. It is worth noting that UK base rates were 4.5% at the time of his visit.

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He told an event hosted by Glasgow Chamber of Commerce that there was a very considerable probability on the basis of the Bank of England’s own forecasts out to 2026 that there would be deflation, and asked: “How can you raise rates with a forecast that says you should be cutting rates? They are out of their minds.”

This week, a closely watched survey revealed that nearly half of Scotland’s businesses believe the Bank of England should stop raising UK interest rates.

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The survey, produced by law firm Addleshaw Goddard in partnership with the University of Strathclyde’s Fraser of Allander Institute, flagged a slew of cancellations or delays to planned investments amid higher borrowing costs.

Asked whether they thought the Bank of England “should continue to increase interest rates this year to bring down inflation”, 46.7% of survey respondents said “no”. Meanwhile, 20.5% said “yes”, 18% declared they were “unsure” and 14.8% responded “not applicable”.

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The proportion believing rates should not be raised further is more than twice that thinking the Bank should continue to increase borrowing costs. Firms were asked about this matter before the latest quarter-point rise in benchmark interest rates to 5.25% was announced on August 3.

This week, we have seen the latest official UK inflation figures.

Annual UK consumer prices index inflation dipped from 7.9% in June to 6.8% in July.

The figures were viewed by economists as leaving the door wide open for a further increase in base rates from the Bank of England.

What the inflation figures also show, however, is the extent of the continuing squeeze on households from the cost of living crisis.

People are having to deal with a surge in their general living costs - with food among the categories of spending in which prices have soared - at the same time as they are absorbing a spike in interest rates which many will not have contemplated.

It is therefore absolutely no surprise that the setting of interest rates has become a very controversial topic indeed.

Another contentious issue which has been in the spotlight again this month is the Scottish Government’s rent controls.

The chief executive of Get Living, Rick de Blaby, blamed these rent controls for the pausing of the build-to-rent specialist’s plans for a major housing development on the former College Street Goods Yard at High Street in Glasgow.

The Get Living development which has stalled is a major one - a £200 million project featuring around 1,500 homes. 

In tough times such as these, rent controls of the undramatic kind implemented by the Scottish Government seem like a very good idea.

However, as my column on Wednesday observed, if what are very moderate rent controls by the Scottish Government are enough to throw major build-to-rent projects off track, this might raise concerns that this model will not be as big a part of the solution to the housing market problems as some might have hoped.

There is clearly no shortage of challenges ahead for households and businesses, with the UK’s economic woe looking set to continue for the foreseeable future.

That should not surprise anyone who has followed the Conservative Government’s economic policymaking since 2010. The Tories have shown consistency. However, sadly for everyone picking up the tab, they have been consistently bad.

You sometimes wonder if the Conservatives themselves might be surprised about just how long they have got away with making a mess of the economy. Their smooth presentation seems sometimes still to persuade people that they are doing a good job, when little could be further from the truth.