The Bank of England has made “another mistake” by not accelerating interest rate cuts, believes the CEO of one of the world’s largest independent financial advisory and asset management organizations.
deVere Group’s Nigel Green is speaking out after the central bank’s decision on Thursday to hold rates steady after last month’s initial reduction—the first in over four years.
As inflation eases and economic pressures mount, deVere asserts that the Bank’s reluctance to push forward with further cuts risks stifling growth and prolonging financial uncertainty for businesses and consumers alike.
“This is no time for hesitation. The Bank of England’s decision to pause rate cuts is a missed opportunity. We believe they need to adopt an aggressive approach now to further lower borrowing costs, drive growth, and restore confidence in the UK economy.”
He continues: “Holding interest rates steady may seem like a cautious move, but it fails to address the urgent need to support economic recovery and competitiveness.
“High borrowing costs continue to burden businesses, particularly in key sectors like manufacturing, retail, and housing, where investment has slowed, and costs remain high.”
deVere Group believes that accelerating rate cuts will not only provide relief for businesses and households but will also stimulate spending, encourage investment, and drive economic momentum.
“The risks of delaying further cuts—such as prolonged stagnation and a slow recovery—far outweigh the benefits of a wait-and-see approach,” comments Nigel Green.
A key factor to consider is the inherent time lag between monetary policy decisions and their effects on the broader economy. “Interest rate cuts can take months to fully filter through to the real economy, impacting borrowing, investment, and consumer spending.”
By delaying further rate reductions, the Bank of England risks extending the recovery timeline, as businesses and households will not see the benefits of lower rates for some time.
Last night’s decision by the US Federal Reserve to aggressively cut rates for the first time – and moving forward into 2025 – highlights the urgency of action. Central banks must remain flexible and responsive to rapidly changing economic conditions. The Fed’s move reflects its commitment to avoiding stagnation and supporting growth.
“The Bank of England risks lagging behind. By holding rates, the UK misses a key opportunity to seize a competitive advantage in the global market,” affirms the deVere CEO.
He concludes: “The Bank of England needs to be bolder, faster, and more ambitious in its policy decisions. The time for aggressive rate cuts is now, before the UK risks losing its edge.”
“The Bank failed with its inaction at the start, passively standing by for too long when prices were already starting to surge.
“It mustn’t fail now with adherence to an unnecessarily restrictive monetary policy which is exacerbating the challenges faced by firms and households across the United Kingdom.”
