Responding to the Bank of England announcement on interest rate rises, Grahame Smith, Scottish Trades Union Congress (STUC) General Secretary said:
“We are disappointed at today’s decision.
“Persistently low productivity, growth and the self-inflicted impact of Brexit and its effect on Sterling are major factors with which our economy must contend. The inescapable conclusion is that today’s interest rate rise, coming at a time when growth is so slow, is a product of failed economic and fiscal policy since 2010. Rock bottom interest rates have failed to properly spark economic growth because the Government did too little to boost demand. The fall in unemployment has been accompanied by low productivity because so many of the new jobs are low skill, low paid and insecure. Quantitative easing benefitted the rich but, for the majority, the effect was rising house prices, sluggish real wages and widening inequality.
“Rising inflation is having a major impact on workers, particularly those in public services, who have endured a seven year pay cap. However, dampening the economy will do nothing to encourage investment led growth. We fear that today’s rise will damage an already fragile economy reeling from the failure of UK Government austerity policies, the suppression of living standards, the dangerously high levels of household debt and the lack of a coherent and meaningful industrial strategy focused on improving productivity.
“It is now even more important that in his budget on 22nd November, the Chancellor commits to increasing government revenue and capital investment in wages and infrastructure.”