increase since 1995, 27 years, which suggests that he probably feels that he could have raised them sooner because it was a very big hike, actually, yesterday. but i think we need to look at what went wrong. clearly if you ve got a 2% target and you re predicting 13.3%, something s gone wrong. the business secretary kwasi kwarteng there. earlier i spoke to yael selfin, chief economist for kpmg. she explained what the impact of raising interest rates will be. raising interest rates essentially means that it is more costly for companies to borrow, it is more costly for households to borrow, and whatever debts they have, that would cost them more. it may take a little bit of time because a lot of the mortgages that people have at the moment are at fixed rates, so that would take time. but ultimately, the main way
on, wednesday the federal reserve announced another interest rate hike as it tries to combat inflation, which is a 40 year high. and on thursday, we learned that the gdp shrank for a second consecutive quarter. to, sound that marks the unofficial start of a recession. but we won t know if we are officially in a recession until an independent group of economists makes that call. and that could take months. joining me now, brian deese, director of the national economic council. brian, thank you very much for coming to the sunday show. okay, i m confused by something. and i think a lot of people are confused by something. what s the president says it is, correct record job creations, there are two jobs available for everyone person looking for work. unemployment is at 3.6%. and yet you have got the fed raising interest rates, and inflation is high. why shouldn t people feel that we the economy is in a bad way?
now, 21%. can you imagine running an election have have interest rates at that level. it was jimmy carter and not ronald reagan to be chair of the fed and he didn t do it until 1979 so the effect of raising interest rates to end inflation was not felt until reagan was president. now we have chairman powell who was going to start raising interest rates this year. ask most economists, that ll have an effect in slowing down the economy a little bit. we had such a boom that we can afford to slow it down a little bit. also, we don t have these built-in accelerator that carson was faced with labor deals and