Chief economist warns rachel reeves interest rate cuts 'too fast'

ANY INCREASE IN INFLATION RISKS CHANCELLOR RACHEL REEVES'S COMMITMENT TO THE BANK OF ENGLAND'S 2% TARGET 15:28, 20 May 2025Updated 15:28, 20 May 2025 Interest rates were cut last

month, with the Bank of England slashing them from 4.50% to 4.25% on 8th May. It was a three-way split vote, with two members of the Monetary Policy Committee (MPC) favouring a bigger cut,

and two, including UK Central Bank's chief economist, Huw Pill, favouring a hold, Reuters reported. Mr Pill has now warned that interest rates have been cut "too fast" and

that his decision was more of a "skip" than a "halt" in rate cuts. READ MORE: MARTIN LEWIS ISSUES 'MUCH NEEDED' UPDATE TO ANYONE USING POPULAR PAYMENT METHOD IN

UK In a speech at Barclays in London on Tuesday, Mr Pill said he had voted against the drop, over inflation fears. He said: “In my view, that withdrawal of policy restriction has been

running a little too fast of late, given the progress achieved thus far with returning inflation to target on a lasting basis. Article continues below “Crucially, I would characterise my May

vote as favouring a ‘skip’ within a continuing withdrawal of monetary policy restriction, rather than a halt to the process of withdrawal.” It's worth noting that the BoE decision is

made independently, as any increase in inflation risks Chancellor Rachel Reeves's commitment to the Bank of England's 2% target. The UK's inflation is currently running at

3.4%. He added: “As reflected in the voting record, my sense is that bank rate plateaued at slightly too low a level in 2023, and the MPC (monetary policy committee) started cutting bank

rate slightly too early in 2024. “To compensate, my starting point is that the pace of bank rate reduction should be ‘cautious’, running slower than the 25bp (basis points) per quarter we

have implemented since last August. “That requires a ‘skip’ in that quarterly pattern at some point. Article continues below “And I decided that the May meeting was an appropriate moment for

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