Bank of England Official Pushes for More Interest Rate Cuts in 2025 Amid Growing Economic Worries
Calls for deeper interest rate cuts in 2025 are gaining momentum, as a key Bank of England policymaker warns that the UK economy is showing signs of strain.
Alan Taylor, a member of the Bank’s Monetary Policy Committee (MPC), believes that the current pace of interest rate reductions may not be enough to protect the economy from rising global pressures.
Speaking at a financial forum in Portugal, Taylor urged the Bank to consider at least three more rate cuts next year to help steer the country through an increasingly fragile period.
“I’m concerned that the UK’s economic recovery is more at risk now than we previously thought,” he said. “If we delay adjusting rates, we might find ourselves facing a much sharper slowdown.”
Taylor’s comments come as households and businesses continue to feel the squeeze from high borrowing costs, even after the Bank made its first rate cut in May, lowering the base rate from 4.75% to 4.5%. In the most recent meeting, Taylor voted for another cut, but the majority of committee members chose to hold rates steady at 4.25%.
He expressed particular concern about weakening consumer demand and potential disruptions in international trade, which he said could push the economy further off course in the coming year.
Although inflation pressures from energy prices and tax changes are expected to ease in early 2025, Taylor warned that underlying economic weakness is beginning to build and could require faster action from the Bank.
The Bank of England has not yet signalled a shift toward a more aggressive rate-cutting cycle, but Taylor’s remarks suggest that internal discussions about the speed and depth of future cuts are far from settled.
As the global economic picture continues to evolve, markets and households alike will be watching closely to see how the Bank responds.
