Bank of England plays down prospect of interest rate cut


Three members of monetary policy committee give statements suggesting they see no sign of underlying deflationary pressure

The Bank of England is making a concerted effort to play down the possibility that it will respond to inflation falling to zero with a fresh cut in interest rates. Three members of Threadneedle Street’s monetary policy committee separately said that they thought inflation – which is likely to turn negative next month – would bounce back soon.

The interventions by deputy governor Minouche Shafik and two of the externally appointed members of the MPC, Kristin Forbes and David Miles, contrast sharply with comments made last week by the Bank’s chief economist, Andy Haldane. Haldane said it was possible that there had been a permanent downward move in inflation and that he could easily envisage cutting rates from their current record low of 0.5%.

Related: UK inflation hits zero for the first time on record

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