Chetwood Bank: BoE rate cut is slow progress for an economy in need of a kickstart
Paul Noble, CEO of Chetwood Bank, comments on today's decision by the Bank of England:
'Today’s rate cut will be welcomed, but it’s slow progress for an economy that’s in desperate need of a kickstart. Domestically and globally, the economy has taken a beating over the last year, but a trade deal secured with the US is one factor that has started to ignite some flickers of hope and likely prompted the MPC to continue to ease off on the brakes.
However, inflation remains above target, and many will argue that the MPC should have not only acted sooner but acted more decisively too. After all, leadership isn’t just about reacting when conditions are safe – it’s about shaping the path forward.
Caution has been the watchword on Threadneedle Street for a long time now, with rates slow to go up when inflation began to skyrocket and then slow to come down with inflation more settled. What was really needed today was bolder action to catalyse the economy and really create growth, rather than more tentative tiptoeing.
Nevertheless, today’s decision should be seen as a green light by investors. Rates are now far below their peak, and the lending markets should respond in turn. Pent-up demand can now be released, and we should expect activity levels to rise in the aftermath of today’s news.
For savers, this cut changes the landscape. The top of the rate cycle now looks to be behind us, and that means the best savings deals may not be around for much longer. Those who wait for their bank to catch up will miss the moment. It’s time to stay flexible, seek out stronger returns, and move ahead of the pack.'
