Why does the UK have the highest inflation in the G7?
This Is Why
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The Effects of Interest Rates on Inflation
When we don't have the supply to meet the demand in the economy, you want to stop people spending. So, higher interest rates do that. They incentivize you to lock your money away and to not spend it. And they do that because it increases the cost of borrowing and incentivizes saving. That's how interest rates work. The core inflation rate is still at 6.2%. It's high. economists this month thought it was going to come down. But there are signs in the UK that we do have this domestically generated inflation problem.
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