Central banks are relying on interest rate hikes as a primary weapon to curb inflation, but economists warn these adjustments may not effectively target the surging costs of everyday necessities like food and energy. Critics argue that raising borrowing costs broadly could slow economic growth while doing little to address the specific drivers behind essential goods prices. The approach risks creating unintended consequences, such as tighter credit conditions for businesses and households already struggling with higher living expenses. With inflation persisting, policymakers face the challenge of balancing short-term relief with long-term stability.
Interest rates are a blunt tool in the fight against the rising price of essential items
