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The Bank of England may have to cut rates as many as five or six times in the coming year as the economy falters, according to a member of its rate-setting committee, as he urged the central bank to take action to ensure a “soft landing”.
Alan Taylor said the BoE’s “gradual” approach to rate cuts would see four cuts of a quarter of a point by the end of 2025. But he warned that a weakening economy could mean BoE needs “an accelerated pace of interest rate cuts”, with its key rate cut by 1.25 or 1.5 percentage points over the next year.
This “pessimistic scenario” becomes more likely given recent data, said Taylor, an outside member of the Monetary Policy Committee. “The latest data and forward-looking activity indicators paint an increasingly gloomy outlook for 2025.”
This is a developing story.
