Quick cuts unlikely because persistently high pay rises likely to be deemed inflationary
- UK pay growth rises 6% despite job loss warnings after Reeves’s budget
- Business live – latest updates
There was a brief period when the Bank of England was poised to cut interest rates and cut them quickly. Official figures showing strong wage growth appear to have ruled that out, at least for the time being.
That is because policymakers at the central bank are likely to consider persistently high pay rises as inflationary. With prices already on track to edge up this year in response to elevated energy prices, only one or two quarter-point reductions in the cost of borrowing are possible without letting inflation jump even higher.
Continue reading…
Source: https://www.theguardian.com/business/2025/feb/18/strong-wage-growth-gives-bank-of-england-interest-rate-dilemma
