Hope for lower interest rates
BOE DEPUTY GOVERNOR SEES POTENTIAL
A BANK of England bigwig has held out hope of an interest rate cut.
Deputy Governor Dave Ramsden, a member of its key Monetary Policy Committee, said his “bias” was toward further interest rate rises.
But he added in a speech that if “inflation stops being a concern, then I would consider the case for reducing Bank Rate, as appropriate”.
The Bank Rate, which influences borrowing costs across the economy, has leapt from just 0.1% a year ago to 3% now.
Most economists think it will keep rising for now, potentially to around 4%.
But Mr Ramsden’s comments show the Bank is looking to a time when inflation is under control and it can start cutting rates.
The average five-year fixed rate mortgage this week fell below 6% for the first time since September’s bungled mini-Budget. Mr Ramsden said he was “acutely conscious” that raising interest rates was adding to the hardship faced by millions of households and businesses amid the cost-of-living crisis. He was giving a speech about the uncertain and unpredictable UK economy at the Bank of England Watchers’ Conference, organised by the Macro Money Finance Society and King’s Business School at King’s College London.