Bank should have cut interest rates in light of faster than expected economic slowdown, says IPPR

Reacting to today’s decision by the Bank of England’s Monetary Policy Committee to hold interest rates at 4.75%, Carsten Jung, principal research fellow and head of macroeconomics at IPPR, said:

“With growth stalling and the labour market slowing down, the Bank of England should have cut interest rates today. Given the Bank now expects zero growth in last quarter of this year, its policy stance is simply too tight.

“Inflation is broadly on track with expectations. It was always expected to go up slightly toward the end of this year. But price pressures should now ease more quickly given weaker than expected growth. The Committee should have put more emphasis on this.”

ENDS

Carsten Jung is available for interview

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David Wastell, Director of News and Communications: 07921 403651 d.wastell@ippr.org