A cut is welcome but we’ll be feeling the effects of high interest rates for a long time to come, says New Economics Foundation

A cut is a welcome decision but we’ll be feeling the effects of high interest rates for a long time to come, says New Economics Foundation 

The New Economics Foundation reacts to the Bank of England’s decision to cut interest rates today. 

Lydia Pried, head of economics, NEF, said: 

“It’s very welcome that the Bank has cut interest rates today — but they should never have been so high for so long, and the consequences will remain with us for a long time. 

“High interest rates have driven people into mortgage arrears, and made it more expensive for our government and businesses to make vital investments, including in things like fighting the climate crisis. And they aren’t responsible for cutting inflation, which was determined by international factors outside the Bank’s control.

“The cost of living is still sky high and energy bills are due to go up in a few months. To boost the economy and protect our quality of life, the Bank should keep interest rates down and take inspiration from Japan and China by introducing a special lower interest rate for vital carbon-busting investments.”

ENDS