Keir Starmer taking credit for Bank of England cuts? "All he should take credit for is creating one hell of a mess in our economy"

PRIME Minister Keir Starmer has appeared to take credit for the Bank of England base rate cut today – as experts hit back by saying “all he should take credit for is creating one hell of a mess in our economy”.

Sterling spiked surprisingly after today's Bank of England rate decision which was a 5-4 vote in favour of a 0.25% cut from 4% to 3.75%.

This comes after yesterday's larger-than-expected drop in UK inflation, from 3.6% to 3.2%.

Starmer tweeted in triumph at the decision saying that it's the sixth interest rate cut since Labour was elected – linking it to Labour's policies that he says is “bringing costs down”.

Financial experts and small business owners have hit back at Starmer's suggestion.

Riz Malik, Director at Southend-on-Sea-based R3 Wealth, said: “Keir and Rachel also should take credit from rising unemployment and business owners who are wondering whether it is still worth it. 

"Even a broken clock is right twice a day and all that Keir should take credit for is creating one hell of a mess in our economy.”

Tony Redondo, Founder at Newquay-based Cosmos Currency Exchange, said the Bank of England was "caught between a rock and a hard place".

He continued: “Unlike Mr Starmer, the Bank of England (BoE) is not economically illiterate. With UK inflation still the highest in the G7 and 60% above target, nine times out of 10, the BoE would be looking to raise and not cut interest rates in keeping with standard economic theory. 

"The trouble is the BoE is very aware that the £70bn of tax rises, new employment law and public sector pay awards doled out by Labour since coming to power in July 2024 have decimated the economy so they are between a rock and a hard place and have cut rates by only 0.25% in an effort to save the economy from going into recession without stoking inflation. 

"To stop inflation, they should have raised rates. To kick-start the economy, they should have cut by at least 0.5%. Sensibly, they have gone for a smaller cut to strike a balance between the two.”

Kundan Bhaduri, Entrepreneur, Investor and Landlord at London-based The Kushman Group, said Labour had made sure that the UK economy was struggling.

He added: "The Bank cuts rates because the economy is struggling, not because Labour policies are working. Bailey and his team are desperately trying to prevent recession while managing inflation that remains stubbornly above target. 

"The real story behind today's cut is simple. The Bank knows Labour's £70 billion tax grab, employment law changes, and public sector pay bonanzas have kneecapped business confidence. 

"They're cutting rates not because inflation is under control, but because the alternative is watching the economy slide into recession on their watch."

Patricia McGirr, Founder at Burnley-based Repossession Rescue Network, said Starmer's tweet was “pure fantasy”.

She continued: "This is make-believe economics in Panto land politics. The Prime Minister did not cut interest rates. The Bank of England did, because inflation eased and the economy weakened. Claiming credit is political dress up, not leadership. Borrowers will feel some relief. 

"But pretending an independent central bank decision is a government win is pure fantasy. It would be more accurate if Sir Keir claimed responsibility for all the broken promises that led to the situation which prompted the BoE to step in."