The Bank of England’s hesitant approach to tackling UK economic lies is to set the stage for a long-term stagnation, warns Nigel Green, CEO of global financial advisory giant Debele Group.
The Monetary Policy Committee (MPC) cut its growth forecast in 2025 by half, but still slashed 7-2 votes to cut the rate to 4.5% with a modest 25 basis points. I threw it. The two dissenting members called for deeper cuts, but the majority “paralysed by inflation fear and chose the ineffective centre,” says Nigel Green.
“This is a policy failure. The Bank of England has returned to the corner where it is scared to actively cut rates due to prolonged inflation, but we also see clear evidence that the economy is halting. . By trying to do both, you won’t achieve either. The supply of male dogs will stay on for a long time.”
Bank staff expect the economy to expand by just 0.75% this year from previous forecasts of 1.5%.
Meanwhile, the UK is facing a £400 billion tax squeeze, further suffocating consumers and business trust.
“This was a moment when we act decisively, promote growth and give our businesses and homes the breathing chambers we desperately need,” continues Devere CEO.
“Instead, MPC has brought about a lukewarm response that could prolong economic pain. The UK heads straight to the stagnant, but inflation rates remain stubbornly high. It’s there.”
Two MPC members who pushed a bigger 50bps cut are aware of the urgency of the situation. But their voices were owned by a committee that was too afraid to move boldly.
“Results? Policies that do not effectively address inflation or support economic expansion.
“This interim interest rate cut will have little to help improve market confidence. Investors should be positioned in an era of declining growth rates and sustained inflationary pressures. The winners , who take aggressive measures to hedge against these risks while seizing opportunities for inflation-resistant assets.”
The Bank of England faces important tests in the coming months.
“If it continues to be confused and indecisive policy path, the UK economy could be blamed for years of stagnation.”
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