Monetary Policy

Bank of England needs to look further ahead


In the Media

Julian Jessop quoted in The Telegraph


Shadow Monetary Policy Committee referenced in The Telegraph

The IEA’s Shadow Monetary Policy Committee’s (SMPC) recommendation that interest rates should be cut has been referenced in The Daily Telegraph, after the Bank of England decided to hold Bank Rate at 5.25 per cent.

The article said:

“Economists on the ‘shadow’ MPC, hosted by the Institute of Economic Affairs, have thrown down the gauntlet by voting unanimously for an immediate rate cut to head off recession and possible debt-deflation by 2025. They also called for a halt to QT bond sales until liquidity has recovered.

“‘The economy is barely growing and inflation will be back to target by the middle of the year, so why on earth is the Bank of England keeping rates at 5.25pc?’, said Trevor Williams, the coordinator of the shadow committee. He voted for a 50 point cut followed by another 50 points in April, arguing that the implied neutral rate is 3pc to 3.5pc at this juncture.”

Read the full piece here or in The Daily Telegraph (02/02/2024, p.23).

The SMPC’s vote was also referenced in another Telegraph piece, as well as in Guido Fawkes, Yahoo! Finance, MSN, and Asset Finance International.

Read more about the SMPC’s decision here.