London, Feb. 3 (BNA) The Bank of England’s chief economist, Hugh Bell, said today, Friday, that it is important not to raise borrowing costs too dramatically, a day after the British central bank indicated that it was close to halting a series of interest rate increases. Started in December 2021.
“We have to recognize that we’ve done a lot on monetary policy already,” Bell told the Radio Times.
On Thursday, the Bank of England raised interest rates to 4%, their highest level since 2008, but dropped language it had previously used about being willing to act “aggressively” if necessary to contain inflation pressures.
Governor Andrew Bailey said inflation, while still above 10%, appears to have turned a corner after falling for two months.
“Interest rates have risen close to 400 basis points…just over a year, and given the delays in monetary policy transmission, there is still a lot of the effects of those interest rate increases to play out,” Pill said. “There are a lot of policies in the pipeline.”
He said the full effects of the price increases had yet to be recorded on the economy.
While the MPC was determined to “finish the job,” Bell also said, “It is also important that we address the possibility of a lot of work to be done.”
The British economy is expected to contract this year and in 2024, according to the Bank of England’s latest forecast.
Bell said the economy is likely to grow quarterly over the next year, which could change the Bank of England’s central forecast for a recession that runs from early 2023 to early 2024.
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