I would cut interest rates at Christmas, says former Bank of England chief economist Andy Haldane
The former chief economist of the Bank of England criticized the Old Lady for being too slow to cut interest rates.
Andy Haldane said he would have actually voted for a rate cut given the UK’s slow growth rate and the progress made in taming inflation.
“I will cut interest rates now, and that probably could have been done from the end of last year,” he said.
He told Sky News that although inflation would be within striking distance of the 2 per cent target by the spring, there was a risk that the bank would be too reluctant to cut interest rates.
He added: “They (the bank) were slow in their rise, and we know that now, and this is one of the factors that contributed to inflation moving away from us.”
Slow growth: Former Bank of England chief economist Andy Haldane (pictured) said he would have already voted to cut interest rates
He added: “The essence of monetary policy is to look forward – not to where inflation is, but to where inflation will be.”
The Bank of England left interest rates unchanged for the fourth time in a row at its last meeting this month, but policymakers have opened the door to lower interest rates later in the year.
The inflation rate fell from more than 11 percent in the fall of 2022 to 4 percent at the end of last year.
The bank expects it to reach 2 percent by the second quarter of this year, although it will rise again in the second half of 2024.
Meanwhile, economists at Goldman Sachs have warned that Brexit has weighed on the UK economy by raising inflation and slowing growth.
The US banking giant said real GDP had underperformed by around 5 per cent since the referendum on EU membership in 2016.
(tags for translation) Daily Mail