In 2007/2008, why was the Bank of England and the government faced with a dilemma?

Question

Quizplus · Accepted Answer

In 2007/2008, the Bank of England and the government faced a complex situation where they were under pressure to both raise interest rates to combat inflation and cut them to prevent a recession. Additionally, there was a need for fiscal stimulus to boost the economy, all while being cautious of breaching the golden rule of not borrowing to fund current spending. This multifaceted dilemma encompassed all the issues listed, making all the choices correct.

In 2007/2008, Why Was the Bank of England and the Government