Question for the smart people. Is the main point of interest rate raises supposed to be to raise the rate mortgages cost, in order to cut spending power?
I had a look and home ownership with a mortgage is only 37% in the UK, so these increases to mortgage rates only directly affect the spending of 37% of the population.
If to bring inflation down, we all need to stop spending as much, wouldn't it make more sense to raise taxes which effect everyone, lowering the spending power across the board? If you're paying for a mortgage surely you'll be contributing a lot less to inflation, as you don't have as much spending money to start with.
I know interest rates also affect the rate at which business can borrow money for investment, but it's the same kind of principle.