THE TELEGRAPH: The value of the pound has sunk sharply as the Bank of England signalled there would be more interest rate cuts later this year.
Sterling dropped 1.1pc to $1.237 after policymakers cut interest rates to 4.5pc in a surprise vote that saw two members vote for even steeper reductions.
The Governor of the Bank of England, Andrew Bailey, is holding a press conference after the Monetary Policy Committee (MPC) voted 7-2 to cut rates as it slashed its growth forecast for 2025 in half.
Officials warned that there were increasing signs that Rachel Reeves’s record tax raid was dragging on the economy, which is predicted to barely avoid falling into recession. » | Chris Price. Szu Ping Chan, Economics Editor | Thursday, February 6, 2025
I have a little lesson for the Bank of England. It is this… Interest rates should ALWAYS be high enough to encourage people to save, and they should always be at least a little higher than inflation, so that people’s hard-earned savings are not eroded. But they should not be so high that businesses are crushed by the burden of their necessary borrowings. This is a simple lesson, but one which central bankers in recent years have either forgotten or have never learned. – © Mark Alexander
