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Suren Thiru: Overly cautious Bank of England risks prolonging economic struggles

Author: ICAEW

Published: 21 Mar 2024

Suren Thiru, Economics Director at ICAEW, responded to today’s interest rate decision by the Bank of England’s Monetary Policy Committee (Thursday 21 March 2024):

“While interest rates staying on hold again was expected, the more dovish vote split and meeting minutes suggest that rate setters are opening the door for rate cuts later this year.

“Though this interest rate hiking cycle is firmly in the rear-view mirror, the long delay between tightening policy and its impact on the wider economy means that the heavy toll of 14 rate rises has yet to fully crystalise. 

“The Bank of England remains overly cautious on the prospect of rate cuts given the startling inflation slowdown and an economy in recession, increasing the risk they prolong our economic struggles by keeping policy too tight for too long.

“With inflation on track to drop back to the Bank’s 2% target in April, an interest rate cut by August looks a distinct possibility.”


Notes to editors:

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