The Bank of England have raised interest rates to 5.25% today. Although the MSM will say this is a shock; it is nothing of the sort.
(A small digression here, most of the predictions you read in the papers come from Nationwide, Halifax and so on. As big mortgage lenders they always say interest rates have peaked, they want more customers after all. Trust only statements from independent economists or institutions that don't have some skin in the game.)
Indeed, my many posts and others on "Labour Inflation Lie's", show that real inflation is much higher; to curb this we need higher interest rates.
However, growth the past 2 years has been financed by cheap debt. The government has expanded spending by printing more money and the consumers have borrowed on credit cards and mortgages.
So a rise in interest rates will hit us all hard (Slicker included!). More rises are on the way and this will cause a general slowdown. However, the government spending goes on printing money (see here) and there is no other growth in the economy. So we have a low growth economy with high inflation. if House prices crash, a possibility, though not a likelihood.
This is known as Stagflation.
Well done Gordon, you have matched my expectations of dragging the economy back to the 1970's. Shame that nice Tory economy you inherited meant you got 5 years extra to achieve your dream, but he-ho.
Now, where's my passport?
Seriously though, make your job secure. The government will be forced to cut the money supply and so reduce demand. Unemployment has already been creeping up and will be forced up further by the cut in supply.