Interest rate cut is too little too late for people struggling with cost of living

The New Economics Foundation responds to the news the Bank of England has cut interest rates to 4.5%.

Hannah Peaker, deputy chief executive, said:

“This interest rate cut is too little to late. A quarter point difference will be small comfort to the thousands of people transitioning to higher mortgage repayments every month, especially as small-ticket items, such as food shopping, continue to be punishingly high and wages aren’t keeping up.

“Interest rate rises have already stunted our economy and individuals’ finances, and the government risks making it worse, if it reacts to changing growth forecasts and fluctuations in the bond markets with further spending cuts.

“To deliver price stability and raise living standards, we need a more joined up approach between the Bank of England and Treasury. Slightly altering central bank operations to save money and introducing green interest rates would enable the government to deliver growth in the longer term through investments in green infrastructure and lifting the two-child cap on benefits.”