Interest rate should have been cut, says IPPR

Reacting to today’s decision by the Bank of England’s Monetary Policy Committee to hold interest rates, Carsten Jung, associate director for economic policy at IPPR, said:

“The Bank should have continued its rate cutting cycle, by lowering rates by 0.25 today.

“This year’s GDP growth has been lower than expected, in large part because interest rates are being kept high for long. Even when considering still elevated inflation, the Bank continues to run an overly restrictive policy, and it is harming ordinary households.

“But even as price increases are set to slow, many essential goods are still very costly. The government should do more to reduce the cost of living for households right now. By rebalancing energy bills to lower electricity prices, helping people with energy debt and regulating the additional fees charged to consumers, the government could provide prompt relief - and demonstrate that ministers are proactive in tackling the cost of living.”