Public financial support has been strict and Rahil Ravis has promised to balance books, deduction of interest rates is one of the few levers that can increase the economic growth of the UK in the short term, and the Chancellor of the Bank of England. Will be happy with the point. Thursday decline – and a clear signal that is now in the cutting mode.
Seven nine members of the Monetary Policy Committee (MPC) supported the quarter point drop, which took the bank’s policy rate to 4.5 %, while making two half -point cuts to become more “workers”. Wanted Bank of England Governor, Andrew Bailey, said the MPC “will take a gradual and cautious approach to further reduce the rates”.
Compared to the effects of runway, power stations and bridges, which becomes the focus of the Chancellor’s “development project”, less loan costs can eat firms and households quite fast foods and families. – And against the correct economic background, the rate deduction can act as a short -term mood booster.
Nevertheless, the bank’s quarterly inflation report, published with a 7-2 rate decision, is unclear.
The MPC has reduced its prediction for GDP growth in 2025, 1.5 % was being predicted in November, up to 0.75 %. It is expected that in the last three months of 2024, economic output will contract 0.1 % and it has increased by only 0.1 % over the current three months-which has to reduce a recession, which describes two consecutive constituencies. As done. Production capacity, the bank suggests that – which wants to improve the Rais badly – has decreased.
This diagnosis suggests a rapid reduction through the Office for Budget responsibility (OBR) when a new forecast is published on March 26, which increased by 1.9 % of GDP, which forecast October I was – potentially cleansing the Ravos room for financial management and deductions in fresh costs. And the sad diagnosis of the MPC has not made a reality in the potential reduction in Donald Trump’s commercial prices, which is still uncertain to calculate.
Even when the economic growth collides with the bottom, the MPC expects to face inflation, which is driven by rising energy prices globally, which water bills And with the help of an increase in bus fares.
By the end of the summer, the bank is predicting inflation that inflation is 3.7 % – which is well less than 11 % peak after the inflation and Russia’s attack on Ukraine, but the bank The target is significant. This uncomfortable combination of weak growth and higher prices will inevitably lead to claims that the UK is moving towards “stagnation”.
So what is the reason for bank policymakers still being able to reduce rates, despite the jump in the pace of price hikes? He believes that the job market is now so weak that workers will be unable to bid their salary for compensation, which is scared by the central banker.
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This may be satisfactory for policy makers, but the Uttarak IT of the lowers of the UK, this means that the standard of stagnation is another dark year of life. The post -revenue revenue calculates that inflation will increase by 1.25 % in terms of inflation in 2025, and then one of the next two years will increase only 0.25 %.
For a government that promises to create a strong economy, which voters can feel in their pockets, the bank’s prediction suggests a very rocky period, making future shiny infrastructure projects No amount of pointing is able to smooth.
