Bank of England decision maker urges interest rate cut

The Bank of England should cut the base interest rate when it meets in two weeks’ time, a member of its decision-making committee has said.

Swati Dhingra (main picture), who sits on the Monetary Policy Committee, said that now was the time for the Bank to “stop squeezing living standards to try to get inflation down”, The Times reports.

Her comments support similar remarks made by the Bank’s Governor Andrew Bailey, but contradict other MPC members and Chief Economist Huw Pill, who have said they are against a rate cut.

The last meeting of the MPC in June decided to keep the base rate at a 16-year high of 5.25%. Official figures due to be published today are expected to show that inflation remains steady at 2%.

Rates down

Mortgage lenders such as Santander and TSB are bringing rates down. Santander is reducing fixed rates by up to 0.14% and trackers by 0.15%.

TSB has reduced residential and buy-to-let mortgages by up to 0.2% while the Yorkshire Building Society is reducing rates by up to 0.25%, which is its second cut in two weeks.

Chancellor support

Labour Chancellor Rachel Reeves said last week she would support a cut in the base interest rate.

She said homeowners with mortgages would welcome the Bank of England reducing its base rate, as it would provide “relief” for many suffering in the cost of living crisis.

Many people with mortgages have seen their monthly payments rise steeply after coming off a fixed rate over the last year. Approximately three million mortgage holders more will see their monthly payments rise over the next two years by an average £180 per month.

Picture: LSE