Chancellor Jeremy Hunt urges Bank of England to not cut rates too quickly and risk raising them again
CHANCELLOR Jeremy Hunt yesterday urged the Bank of England not to cut rates too quickly and risk raising them again.
The Bank kept rates at 5.25 per cent because inflation is still above its two per cent target.
Boss Andrew Bailey said he was “optimistic” and said he believed inflation “will fall close to our target in the next couple of months”.
It fuelled hopes of a cut as early as June.
Chancellor Jeremy Hunt said that he would “much rather they waited until they’re absolutely sure inflation is on a downward trajectory than rush into a decision that they had to reverse at a later stage.”
“What we want is sustainably low interest rates, and I think what’s encouraging is that the Bank of England governor, for the first time, has expressed real optimism that we’re on that path.”
GDP figures out today will likely show the economy has exited recession.
It now predicts the economy to grow by 0.2 per cent in the second quarter of this year, helped by the government’s cut to national insurance and boost to child benefit payments.
Last month The Sun revealed that figures all spelled out good news for property, prices, industry and the stock market.
In housing, the number of approved mortgages rose in February to the highest level since the 2022 mini Budget cratered the market.
There were 60,400 granted, compared with 56,100 in January, Bank of England figures showed. And interest rates on those loans is now below 5 per cent.
Stuart Cheetham, boss of MPowered Mortgages, attributed the rise to a price war between lenders.
He said: “A flurry of interest rate cuts in the first weeks of 2024 made mortgages cheaper and kick-started demand from many of the would-be homebuyers who sat out in 2023.”