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Bank of England tentatively lays the groundwork for rate cuts, ICAEW says

Author: ICAEW

Published: 01 Feb 2024

Suren Thiru, Economics Director at ICAEW, responded to today’s interest rate decision by the Bank of England’s Monetary Policy Committee (Thursday 1 February 2024):

“Keeping interest rates on hold again will provide a confidence boost to those households and businesses struggling to deal with a host of other cost pressures and wider economic uncertainty.

“While the Bank’s tone on rates remains disappointingly downbeat, there are signs they are tentatively laying the groundwork to loosen policy sooner rather than later with most members voting for a rate hold and one member voting for a rate cut.

“The Bank of England must be careful not to fall behind the curve on interest rates. It tightened policy too late when inflation spiked and now keeping rates elevated for too long risks needlessly squeezing an already flagging economy.

“With the Bank now expecting inflation to fall back to its 2% target more quickly, the Monetary Policy Committee could well start loosening policy by the summer, particularly if the economy underperforms their current expectations.”


Notes to editors:

Contact: ICAEW media office media.office@icaew.com, tom.mackintosh@icaew.com or 07866 853 841