Auto Amazon Links: No products found. Blocked by captcha.
In an interview with the Times, Bank of England governor Andrew Bailey indicated that the central bank is prepared to implement more significant interest rate cuts if there are signs of a slowdown in the job market. Bailey expressed his belief that the trajectory for interest rates is downward, with the current rate at 4.25%, to be reviewed at the Bank’s upcoming meeting on August 7. These interest rate adjustments have a direct impact on mortgage, credit card, and savings rates for a vast number of individuals.
Bailey highlighted that the UK economy is operating below its potential, resulting in excess capacity that could help bring down inflation. He noted a trajectory of businesses making adjustments in terms of employment and working hours, as well as offering smaller pay increases, attributing this trend partly to the increase in employers’ national insurance contributions by UK Chancellor Rachel Reeves earlier in the year. Reeves’ action, raising national insurance rates for employers from 13.8% to 15%, was projected to generate £25bn annually.
The governor emphasized his belief in a downward trajectory for interest rates, despite some questioning the decision to cut rates with inflation above target. Interest rates were kept steady at 4.25% in the Bank’s previous meeting in June, following earlier cuts within the year. Bailey reiterated the bank’s stance on a gradual and careful approach to rate adjustments. The UK economy experienced a 0.1% contraction in May, following a decline in April, primarily driven by a decrease in manufacturing activity and subdued retail sales, as reported by the Office for National Statistics.
The underperformance of the UK economy in recent months has increased pressure on the government to focus on initiatives that stimulate economic growth. With the Bank of England poised to monitor developments in the job market and the overall economic landscape, the upcoming decision on interest rates carries significance for various sectors and individuals across the country
Read the full article from The BBC here: Read More
Auto Amazon Links: No products found. Blocked by captcha.