The Bank of England has cut interest rates by 0.25 per cent to 4.5 per cent but downgraded forecasts on growth.
However, in less good news for Ms Reeves, the Bank downgraded its forecasts for growth projecting that GDP fell 0.1 per cent in the fourth quarter of 2024 and will rise by just 0.1 per cent in the first quarter of 2025.
Rachel Reeves has received a much needed boost in her push for economic growth after the Bank of England announced a cut in interest rates but was dealt an immediate blow over projections that inflation is set to rise.
The announcement follows Ms Reeves’ major speech last week where she doubled down on her economic growth agenda in a bid to relaunch her economic plan with proposals to unleash massive building projects across the UK including a new runway at Heathrow Airport.
Alpesh Paleja, deputy chief economist, CBI, said: “Today’s cut to interest rates was in line with our expectations and reinforces our view of a gradual loosening in monetary policy over this year.”.
