M&S boss Archie Norman says interest rate hikes were ‘totally ineffective’

Marks & Spencer chairman Archie Norman has dismissed the Bank of England’s aggressive interest rate rises as “totally ineffective”.

The most intense cycle of rate increases since the late 1980s did “not much” to cool price increases, he argued.

Falling inflation levels have little to do with the bank’s medicine and more to do with broader economic trends, said Norman, one of Britain’s most respected bosses.

He added that central bankers had only a “marginal effect” in helping inflation fall to 4 percent in January from its peak of 11.1 percent in October 2022.

The reference rate was increased 14 times since December 2021, causing pain for millions of borrowers. Since last fall it has remained at 5.25 percent.

Norman said: ‘What we have shown over the last three years is that monetary policy is totally ineffective. There is a marginal effect, but inflation was driven by global macroeconomic prices. It did not influence the price of gas. It had no real relation to the price of food.’

“We probably sometimes listen too much to central bankers,” the former lawmaker told Bloomberg.

There are fresh hopes of a cut after Jeremy Hunt detailed a brighter outlook for the economy in last week’s Budget.

As Prime Minister Rishi Sunak prepares to go to the polls later this year, the Conservatives are hoping for a rate cut in the coming months.

Norman’s comments came days after its chief executive, Stuart Machin, warned that doing business in Britain is “like running up an escalator with a backpack on your back”. He argued that shops will be forced to raise prices if there is no intervention to help the High Street with difficult costs such as business rates.