Further rate cuts unlikely to stimulate growth

Commenting on yesterday’s interest rate decision by the Bank of England’s Monetary Policy Committee, Suren Thiru, Head of Economics at the British Chambers of Commerce (BCC), said:

“The Bank of England’s decision to keep interest rates on hold was unsurprising.

“Although the post-referendum economic data has been decidedly mixed, we expect growth to slow sharply in 2017. We anticipate the MPC will move again to cut interest rates before the end of the year.

“However, with UK interest rates already close to zero, further cuts will do little to stimulate growth and are likely to exacerbate the cost pressures that both businesses and consumers may face in the coming months from a weakening currency.

“With the monetary policy tools at the MPC’s disposal largely exhausted, it is vital that the government uses the upcoming Autumn Statement to deliver a fiscal environment that supports confidence and incentivises businesses to invest.”

Share this