GDP reaction: Treasury should “hold its nerve”, says IPPR

IPPR has reacted to this morning’s GDP data release for November 2024, Pranesh Narayanan, economist at IPPR, said:

“Today’s growth figures are encouraging but not outstanding. As we have repeatedly said, it’s clear that interest rates have become a drag on growth. They are too high, given the expected inflation path, the Bank of England must act soon to bring them down or is putting our prosperity at risk for no good reason.

“The Treasury should continue to hold its nerve and avoid knee jerk reactions to excitable bond markets. They were moving more in response to uncertainty around global inflation and interest rates driven by speculation around incoming President Trump’s economic policies, rather than anything going on in the UK or Rachel Reeves’ budget. More public investment and well-funded public services will provide businesses and consumers with the foundations they need to achieve strong growth.”