Former Bank of England chief economist suggests pause in rate hikes as economy is on ‘relatively unsteady legs’
Note: Former Bank of England Chief Economist Andy Haldane
The former chief economist of the Bank of England has suggested a pause in interest rate hikes now that the economy is on ‘relatively unsteady legs’.
Andy Haldane warned of the risk that too large a rate hike could jeopardize the recovery.
Data shows that Britain narrowly escaped recession at the end of last year, with GDP growth of 0.1 percent in the fourth quarter.
But it remains 0.6 percent below pre-pandemic levels and experts foresee a bumpy road even as inflation is expected to ease.
Haldane told The Sunday Times: “I think given the magnitude of the tightening we had over the course of last year and the early part of this, and with the economy still on relatively unsteady feet, it could be a while now to pause and take stock.’
Economists argue that it may take some time for the impact of interest rate hikes or tightening to feed through to the real economy.
Due to the rapid series of increases, the Bank’s interest rate has risen from 0.1 percent in December 2021 to 4.25 percent today.
Haldane, now chief executive of the Royal Society for Arts, was chief economist at the Bank of England from 2014 to 2021 and a member of the MPC.