Bank of England's Cautious Path: Gradual Rate Reductions Amid Economic Changes

The Bank of England reduced interest rates for the second time since 2020, predicting gradual future rate cuts amid increased inflation and growth projections after the government's budget. Governor Andrew Bailey emphasized a cautious approach in monitoring U.S. policies and fiscal measures' impacts on the UK economy.


Devdiscourse News Desk | Updated: 07-11-2024 18:42 IST | Created: 07-11-2024 18:42 IST
Bank of England's Cautious Path: Gradual Rate Reductions Amid Economic Changes
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The Bank of England has executed an interest rate cut, marking only its second since 2020. Officials foresee a steady, gradual path for future cuts due to higher inflation and growth projections following the latest government budget.

Governor Andrew Bailey highlighted the uncertain landscape post-U.S. election, expressing a watch-and-wait approach to potential new policies. Bailey stated the institution's intention to work constructively with the upcoming U.S. administration, mirroring past collaborations.

Regarding fiscal policies in the recent budget, the Bank forecasts a temporary GDP boost, despite anticipated tax hikes. Bailey noted that the path for interest rates remains relatively unchanged, with a focus on controlling inflation and monitoring labor market signals.

(With inputs from agencies.)

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