Can someone tell me how raising interest rates in UK can control inflation
caused by foreign price rises ??
More likely to increase inflation imo !!Call me paranoid, but is it not possible
that the BOE is not working for the UK but is working for the private banks
that they borrow from ? Why else would they raise rates at just the time
when government borrowing is at record levels due to covid borrowing ??
Can anyone explain this to me ??
Donkeyman! 
Sorry DM, as usual, I asked this question a while ago, and got no definitive answer, there must be someone out there who knows.
It really is very simple. Higher interest rates > less money to spend > less demand > lower prices > less inflationary pressure.
Well, that’s the theory anyway. The danger is that slowing the economy too much leads to a recession.
Curbing spending…very confusing but thats my take on it
Are you talking Global or Domestic inflation Bruce?
Figures suggest the UK is in recession so a quarter point interest rate rise isn’t going to have much impact , on the other hand pensions are going down along with other investments on the stock exchange. Panic hit yesterday with 3% drop.
It’s the mail but with quotes from so called experts.
Higher interest rates make borrowing more expensive and, thus, reduce demand for goods and services, which makes it harder for companies to raise prices which curbs inflation.
Still don’t do nowt about the core Global causes, IE Gas/Petrol etc etc.
Domestic, interest rates vary from country to country
Yes but less money means you buy less imported goods, inflation is the trise in the otal sum of imported and domestic goods, you just buy less of it all to cause less demand which reduces the prices or at least puts less pressure on prices
look at it this way spits - you won’t be able to buy a second or third sur ron that easily anymore??
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Globally, there’s a scarcity of fossil fuels like oil and gas as a result of the war in Ukraine, an increasing demand from booming economies after the Corona crisis, and there’s a scarcity of goods like building materials, chips, etc. caused by massive supply chain problems resulting from the zero-COVID policy in China which all lead to higher prices for the consumer.
the way I see it is interest rates should be a lot higher so those of us that have savings to get a better return on their money. Every thing at the moment seems to be in the favour of those who can’t afford but still go out and buy unnecessary items. If it wasn’t for the many who put their money into government saving schemes the country would be in a far worse financial position
As for foregn inflation that depends very much on each counties financial position more than the UK inflation rates
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Hi
Raising interest rates is a very blunt weapon when inflation is caused by external factors.
It does however ensure that the very rich make more money.
As these people are huge donors to the Tory Party, it should not be a surprise.
@Bruce , My question was ‘how do UK Interest rates affect foreign generated
iinflation’ Brucy ??
Pay more attention !!
Donkeyman! 
Comprehension has never been your strong point Assman, I told you how it affected it, please read what I said.
@swimfeeders , At last, l have an answer that makes sense,( oh and
Spitty too,sorry spit !!)
Swimmy should have included the banks that the government borrows from
in the ‘very rich’ though ? These banks may or may not be Tory donors but
they are all formed of groups of low profile but very rich individuals and their
business consists of funding governments ( any government ) with long term
usually low interest money from their private funds which sit in their
private banks! These private banks used to be called ‘the reserve bank’ and
are supposed to be controlled by central bank (BOE) which sets the interest rate these banks can charge the government and also prints more
money as is deemed fit,( by who?)
Surely this system is open to collusion between the central bank and the
lending banks which enables the lending banks to enter into a deal and
then later increase the rate and thus doubling ortrebling their profits??
Hence my remark about me being paranoid ??
Donkeyman!
@Bruce ,But as the price of imports increases it also reduces demand
and therefore raising interest rates should be unnecessary, in fact it could
be detrimental ??
My question stands !l
Donkeyman! 
What is the difference between the UK and private banks. Aren’t the latter part of the UK, too? The BoE doesn’t borrow from private banks but vice versa: private banks borrow from the BoE and hand out the money as credits to the consumers at a higher interest rate.
Excessive government spending increases interest rates. The BoE raises the base or bank rate when the inflation rate (speed of inflation) is too high to make borrowing and spending more expensive so that demand gets cooled off and prices (inflation) go down.
@Dachs , Thanks for the input Dachs ! I think you have got the retail banks
mixed up with the the private investment banks ??
The retail banks serve the purpose of issuing credit to the man in the street
and they do get their money from the BOE !
The investment banks run on ‘real’ money which is pre-existing, this money
is sometimes called old money as these banks have held this money for
a very long time, obviously with decades of lending to government this money has grown and they now have huge amounts between the lot of them !
At the present moment UK Public debt stands at about 2 trillion?
When Boris borrowed it the rate was •1%
It has just gone up to l think 1•75%? Imagine the increase in profit for the
‘private’ banks ??
Hence my queries !!
Donkeyman! 