UK interest rates latest: Bank of England cuts interest rates to 4.5%, the lowest level since June 2023

Luke Mintz
World at One reporter

The UK could also be getting into a interval of financial “stagflation”, in line with a former Financial institution of England rate-setter.

Jonathan Haskel, who was on the Financial institution’s Financial Coverage Committee till final summer season, has been chatting with BBC Radio 4’s World at One.

Commenting on the rate of interest reduce, Haskel says: “It is what the market anticipated however I’m afraid to say that the forecast might be summarised in a single phrase – which the Governor was unwilling to make use of, but it surely’s there I believe – which is stagflation.

“The financial system is in a tough place. The Financial institution’s forecast final yr for the financial system this coming yr was for sluggish progress however inflation and rates of interest coming down. However the brand new forecast, I’m afraid… is for even slower progress.”

Haskel, who’s now a professor of economics at Imperial School London, added: “It is a stagflationary prospect and I’m afraid it’s not very fairly.”

Stagflation, a contraction of the phrases stagnation and inflation, is used to indicate durations of excessive inflation and stagnant financial progress.