Low growth and high interest rates, not inflation, are the real economic challenge, says IPPR

IPPR has reacted to this morning’s ONS data release of CPI data for December 2024:

Dr George Dibb, associate director for economic policy at IPPR, said:

“Inflation figures are coming down, they remain only slightly above the most recent Bank of England forecast, and below what the Bank expected only a few months ago. Closely watched core inflation also continues to ease which shows that the British economy continues to be on track for disinflation. This latest data reinforces the fact that inflation does not pose an immediate cause for concern for the economy.

“The real warning light remains the UK’s weaker-than-expected growth. With the latest data from before the budget lagging behind the Bank’s own projections. High interest rates are stifling growth, as we’ve repeatedly warned, and this slowdown is driven by tight monetary policy—not the new government’s policies. To boost growth and economic prosperity we need interest rates to come down.”