Prime Minister Rishi Sunak’s commitment to limit immigration into the UK may clash with the Bank of England’s endeavor to control inflation.
Sunak, in his struggle to gain traction in his re-election bid, has promised to introduce a strict annual limit on visas issued to those seeking to come to Britain.
Economists warn that these curbs could reduce the flow of workers, restraining the UK’s ability to grow without sparking a jump in wages and prices.
The Bank of England and the government’s rationale for raising interest rates, a point of contention among economists, is that it increases the cost of borrowing.
Consequently, individuals and businesses have reduced disposable income and diminished incentive to spend, leading to decreased demand for goods and services.