On August 2, the bank of England decided to increase interest rates. The purpose is to increase confidence to stimulate economic growth. The increase in employment has created concern because there could be a high demand for money, which will increase inflation. this is based on the assumption that low interest rates in an environment where there is employment, employers would raise wages to attract the best and scarce workers, who by spending the excess money as a result of wage increases would increase inflation.
Austrian business cycle theory have something to say about it. Developed by Ludwig von Mises and F.A. Hayek, highlights the ability of central banks to stimulate artificial economic growth through low interest rates; which is also artificial. this creates the situation where the central bank should print more money; but the moment arrives when not only the artificial order created begins to have problems, but the circulating money has no support in the economy and is therefore also unjustified and its value decreases, needing more money printing; and that is inflation, and as it increases, so does the recession and there the economic crisis that had sought to avoid explodes.
To learn more about this topic, you can consult this article and this one.
