Economists say higher interest rates are not the answer


After Tuesday's news that the rate of inflation hit 4% in January, many wonder whether interests rates will rise again.

The governor of the Bank of England, Mervyn King, stoked speculation even further in his letter of explanation to the Chancellor, when he said inflation was only likely to come down if interest rates are increased in line with market expectations.

Given that markets expect the first of several interest rate rises this year to arrive in May, this has been taken by the City as the strongest hint that rate hikes are on the way.

Brian Hilliard, the Chief Economist at Societe Generale, and Gerard Lyons, the Chief Economist at Standard Chartered, speak to BBC Radio 5 live's Mickey Clark about these inflation numbers.

You can hear the full interview in the Wake Up To Money podcast. For more Radio 5 live stories, please visit the Best Bits page.

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