Bank of England Boss Says “Slow‑Mo” on Rate Cuts
When the Bank of England’s governor, Andrew Bailey, hit the mic at the Treasury select committee, he made it plain that any move to lower interest rates will be a careful, step‑by‑step dance. He’s got to play it by the book while he evaluates Labour’s latest gamble: slashing employers’ National Insurance (NI) charges.
What’s Shaking the Economy?
The Autumn Budget thrown out a tidy £25 billion bump in employer NI. That’s not just a number—it could ripple through wages, hiring, and the overall cost of borrowing. Bailey wants to see how all that unfolds before pulling the trigger.
Key Take‑aways from Bailey’s Talk
- “Gradual” is the word of the day – We’ll tighten monetary policy slowly so the economy can soak in the changes.
- There’s a chance the minimum wage could tick up in 2025 (thanks, Chancellor!).
- Mortgage costs are on the rise, too, thanks to the £70 billion annual increase announced by Rachel Reeves.
- Bailey cautioned that reduced employment might be a real risk if firms feel the pinch.
Why the Slow Roll?
Bailey is basically saying, “Let’s not rush; we’ll keep the policy on hold just enough to watch for inflation spikes and market jitters.” The goal: make sure the bank’s moves don’t accidentally shift the country into a recession.
Bottom Line
Brace yourselves: the Bank of England isn’t dropping rates any time soon. It’s taking a measured, “take‑your‑time” approach to see how Labour’s new NI play hits the ground. And if we’re lucky, the minimum wage will climb next year—otherwise, we’ll keep an eye on that mortgage‑cost wave. Stay tuned, and keep your coffee handy—this is one budget you’ll want to follow.
