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"The Bank of England Monetary Policy Committee has more Craig Revel Horwoods than Anton Du Bekes"

ended 16. December 2024

Newspage asked a variety of SME business owners, from mortgage brokers and forex experts to accountants, whether the Bank of England should cut rates this week. Their views are below.

12 responses from the Newspage community

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Tony Redondo
Founder at Cosmos Currency Exchange
Julian Jessop, economics fellow at the IEA, has indicated that the recent UK GDP data should place the UK on "recession watch." However, the situation may be even more dire, with the spectre of stagflation looming over the economy. The UK has experienced two consecutive months of contraction, each by 0.1%, and key economic indicators are trending downward. While a proactive Bank of England might consider cutting interest rates, this seems unlikely due to inflationary pressures from public sector pay rises and the October Budget's effects. The anticipated inflation from Trump's tariffs, set to take effect after his inauguration on January 20, adds further upward pressure on prices. With both domestic and international factors contributing to inflation, the outlook for the UK economy remains challenging. The combination of these elements suggests that businesses should prepare for an extremely challenging economic landscape ahead.
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Graham Cox
Director at Bridging Hub
With an economy on the brink of recession, the Bank of England should cut the base rate this week. Any inflation concerns must surely be tempered by the low level of UK business confidence expressed in recent surveys. Living standards have plummeted over the past 15 years, and being cautious is not going to stop the rot.
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Keith Budden
Managing Director at Ensurety
Ask any business owner, or any mortgage holder, and the answer to whether the Bank of England should cut rates would be a definite yes. The problem is that the Bank of England Monetary Policy Committee has more Craig Revel Horwoods than Anton Du Bekes. While the public want a 10 we are more likely to get a seven. With businesses set to feel the full force of the combined Employers' NIC and Living Wage hikes, and energy and water bills likely to increase yet again, even a 0.25 cut in the base rate would make a real positive impact and be the best Christmas present the Bank of England could give to the economy. It may also hopefully be enough for us to avoid a recession.
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Mike Staton
Director at Staton Mortgages
The Bank of England should 100% cut rates this week. It is about time the UK public were given respite from the disturbing previous two years. The UK needs to see growth and the Bank of England needs to act now to relieve the mental strain on the public. The uk public deserves the right to move on with their lives and to start to plan for a more stable future without the fear of making their mortgage payment next month.
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Ben Perks
Managing Director at Orchard Financial Advisers
They should, but they won’t. The UK economy has been a white knuckle rollercoaster ride this year and if they make a cut this week it would inject some confidence before the year end. As the New Year's thick heads clear business would return in 2025 with a spring in its step. But they have been data driven and ever cautious and I don’t think they have the bottle to reduce in current market conditions.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
A base rate reduction is needed to save the economy, but the Bank of England will leave the superhero cape in the closet and hold rates as they are. The cuts will come next year, but as usual they will be too little too late.
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Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
The Bank of England must show some guts and cut rates now. The economy is shrinking, Labour’s Budget has killed confidence, and the UK is teetering on the edge of recession. Stop dithering, stop delaying—act boldly and kickstart the recovery before it’s too late.
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Simon Bridgland
Broker at Charwin Private Clients
High streets were buzzing at the weekend but unfortunately for the economy they weren’t spending as the noticeable thing was the obvious lack of shopping bags. Such a telltale sign of an economy contracting, especially when it should be a time of vast spending. The Chancellor needs to make it easy for people to spend money. Lowering rates will free up money for families and business, boosting spending to strength our economy.
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David Stirling
Independent Financial Adviser at Mint Wealth
The UK economy has been flat-lining, and if inflation figures are poor on Wednesday, there is more chance of Santa getting stuck in a chimney in Threadneedle Street than a decision to cut the base rate. Holding the rate at this stage won't be the news that borrowers crave, that's more likely to be held until the New Year. Lenders can still be competitive however and offer mortgage deals based on their swap rates, so no movement in the Bank of England base rate is not always doom and gloom for borrowers.
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Justin Moy
Managing Director at EHF Mortgages
It's unlikely that we will see much festive cheer from the Bank of England this month or early into 2025, as the balance between the reclining economy and increasing inflation will put the MPC at loggerheads about their next move. Ultimately if we sink back into recession there will be little other remedy but to cut rates to encourage borrowing for growth, but instead, we will probably meander along until it's too late to do anything constructive.
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Rakesh Dua
CEO at DUA Accountancy & Business Consultancy
Should the Bank of England cut rates? The answer from the business community and individuals would be yes without a shadow of doubt. The risk is that it may be too early. What we do know is that the combination of inflationary pressure and negative economic growth has created a monumental headache for policymakers. Sometimes the Bank of England needs to focus on what needs fixing urgently and in my view that’s getting growth stimulated and bringing back consumer confidence. We need a bounce-back feeling to go into Christmas with and to start the new year.
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Iain Swatton
Director at Exemplar Financial Services
The Bank of England faces a classic dilemma this week. Inflation is still lingering, but the warning lights of a stalling economy are flashing brighter than Rudolph’s nose. While a rate cut could provide relief and confidence, the Bank will likely err on the side of caution, holding fire until the new year. The wait-and-see approach reflects the fine balance between cooling inflation and avoiding further economic slowdown—but borrowers and businesses are growing impatient for action.