Bank of England's Dhingra Calls for Rate Cuts

Swati Dhingra, a member of the Bank of England's Monetary Policy Committee, emphasized the need for more aggressive interest rate cuts in light of the current economic strain caused by high rates. In a Bloomberg TV interview, she described the current monetary policy as 'very restrictive,' negatively impacting consumer spending, business investment, and overall supply capacity. Dhingra advocates for a gradual easing of rates, estimating the neutral rate to be between 2.5% and 3.5%, an increase from previous estimates. She expressed concerns about the indirect effects of a potential global trade war on productivity and business adaptability. Meanwhile, Bank of England governor Andrew Bailey hinted at possible rate cuts next year if inflation continues to decrease, currently standing at 2.3%. However, market predictions suggest a high probability of no changes in the upcoming committee meeting.