BoE/Dhingra: We Need to Further Ease Interest Rates

Forex - Swati Dhingra, a member of the Bank of England’s Monetary Policy Committee, stated that the central bank needs to lower interest rates further due to the policy stance still being very restrictive and harming living standards, business investment, and potentially long-term productivity. Dhingra commented, “The combination of all these factors—weak consumption, weak investment, and potential damage to supply capacity—concerns me. That’s why I believe we need to loosen policy further.”

Dhingra, who supports a "gradual" approach to changing interest rates, similar to the language used by BoE Governor Andrew Bailey, noted, “Being gradual is often better because it gives people certainty to plan ahead.”

Financial markets do not expect the BoE to cut rates at its next meeting on December 19 and foresee a 0.71 point reduction by 2025, indicating a slower easing pace compared to the European Central Bank or the Federal Reserve. Dhingra mentioned that the UK faces limited options to establish an independent trade policy in response to any tariffs imposed by US President-elect Donald Trump.