Inflation data shouldn't deter us from rate cuts, says Bank policymaker
A member of the Bank of England's interest rate-setting committee has warned that higher-than-expected inflation and growth figures should not distract policymakers from continuing to cut borrowing costs.
Alan Taylor, who was one of two monetary policy committee members to call for a bigger 0.5 percentage point cut last month, said that while he was not going to forecast his future votes, he felt that recent economic data was being led by one-off factors.
'I'm not going to pre-emptively announce my vote, but I think I indicated in my dissent that I thought we needed to be on a lower [monetary] policy path,' Taylor told the Financial Times in an interview,
The latest figures show UK inflation jumped by more than expected in April, to 3.5% from 2.6% in March, almost a percentage point higher than the Bank of England's 2% target.
However, much of that rise reflected a jump in water bills, energy costs and council tax. '[Higher inflation] is not coming from demand and supply pressures; for the most part, it's coming out of one-time tax and administered price changes,' Taylor said, adding that energy prices had otherwise been trending downwards.
'[The BoE] forecast path is saying there is going to be an inflation hump and then it's going to go away,' he said
While the UK economy grew 0.7% in the first quarter, marking the fastest rise in a year, economists have said it was largely the result of stronger levels of business investment as companies rushed to beat Donald Trump's tariffs. Taylor said he was still 'pretty concerned' about the outlook.
Taylor was among two members of the nine-strong MPC who voted for a bigger 0.5% percentage point cut to interest rates earlier this month, which were ultimately cut by a quarter of a percentage point to 4.25%. Two members voted to hold at 4.5%.
His concerns about the outlook are due to 'more risk piling up on the downside scenario because of global developments', he said. Taylor said that includes ripple effects from the US president's trade war.
Sign up to Business Today
Get set for the working day – we'll point you to all the business news and analysis you need every morning
after newsletter promotion
'A trade war is going to be negative for growth,' Taylor said, adding that the tariff regime 'is going to be a drag on growth for both the frictional reason and the uncertainty reason'. While the Labour government has hailed three trade pacts struck with the EU, India and US in recent weeks, Taylor said the UK was 'not getting back to where we were before'.
He said: 'These other things are perhaps welcome in their effects in certain sectors, but I think we need to keep our eye on the big shocks. We got a massive change in trade policy; we have a lot of uncertainty: I would focus on that as the big story.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
BBC News
28 minutes ago
- BBC News
Colchester Castle Park bridge repairs halted after hours
Long-awaited work to repair a collapsed bridge has had to be halted after the discovery of moorhen bridge has been out of use since December 2023 - when part of the Middle Mill weir at Castle Park in Colchester fell into the River work started last Tuesday but had to be suspended the same day after one nest was found within the damaged structure - and a second in a nearby construction City Council, which is responsible for the weir itself, said it was "committed to continuing the repairs as soon as it is appropriate to do so". "The situation is being carefully monitored, and we are working closely with contractors and relevant agencies to determine the best course of action," a spokesperson to the Wildlife Trusts, moorhens are protected in the UK under the Wildlife and Countryside Act 1981, and are known for their "large and untidy-looking nests".It is illegal to move the nest of a moorhen while it is in use.A meeting has been scheduled to "assess the impact on the project timeline", the council added. Last week, the Liberal Democrat and Labour-led authority said a boating lake in the park had closed because the damage had impacted water levels.A diversion of about 1km (0.6 mile) has been in place while the footbridge, owned by Essex County Council, has been closed. Follow Essex news on BBC Sounds, Facebook, Instagram and X.
Daily Mail
28 minutes ago
- Daily Mail
Freddy Brazier 'skips brother Bobby's family birthday bash' amid feud with dad Jeff - as he admits he's 'sad all the time' in new TikTok video following mental health battle
Freddy Brazier has reportedly skipped his brother Bobby's birthday bash amid his feud with dad Jeff Brazier over his relationship with grandmother Jackiey Budden - as he admitted he's sad in a new TikTok video. EastEnders star Bobby turned 22 on June 2, and while other loved ones including his father and step-mum Kate were present, his sibling was noticeably absent. Despite Freddy acknowledging the birthday online, it is said that there was 'sadness' felt by the family that Freddy wasn't there to celebrate in person. Freddy was seen this week smoking suspicious looking cigarettes with Jackiey who he is said to now be living with. A source told The Sun: 'It was a really nice family occasion but everyone really missed Freddie. 'He was of course invited but he is making his feelings quite clear at the moment about who he wants to be spending time with.' From A-list scandals and red carpet mishaps to exclusive pictures and viral moments, subscribe to the DailyMail's new Showbiz newsletter to stay in the loop. They added: 'He did acknowledge that Bobby's birthday online but there was some sadness that he wasn't there with his brother.' MailOnline have contacted representatives of Freddie for comment. Meanwhile, Freddie sparked concern after he shared a TikTok implying he's 'sad all the time'. A clip featuring personal photos containing images including brother Bobby and late mum Freddie, featured words that read: 'I feel sad all the time. I'm not the person I was!' The video, set to a heartbreaking audio of a man expressing his sadness, Freddie's video continued with statements from the audio which said: 'I lost most of me and all the good stuff, all the happiness enjoying, I feel like I'm nothing you know?' 'People think I'm sort of OK you know? Like, I'm getting on with it, I'm snarky now and get, and this is a lapse. But it's not! This is me all the time now. 'I'm not well but I remember what it was like to be normal so I do an impression of that. 'But this is what I really am and I want to be normal again. But I'm weak you know?' Captioning his post, Freddie penned: 'As a man, I bottle up my emotions and hide my feelings away. I rarely let them out to play. With all that's going on in the media right now emotions are high. Feelings are being felt and thoughts are being heard and played out.' He then asked his male followers how they were mentally and urged them to speak out about how they felt and what's 'hurting them'. His post was met with a plethora of supportive messages from fans. It was revealed last month that Jeff is taking action in an attempt to legally block contact between Freddy and the mother of the late Big Brother star Jackiey Budden amid concerns over his welfare. Jeff, shared both Freddy, 20, and Strictly's Bobby with the late Jade Goody who tragically died in 2009 from cervical cancer aged just 27. Jeff has hired a leading barrister for the upcoming hearing which is the latest in part of a long-running feud between Jackiey and Jeff. Speaking to MailOnline from her ground floor flat in Bermondsey, south east London, last month, Jackiey hit out at the proceedings. She said: 'I know what this is all about. It (the situation with Jeff) doesn't matter. It doesn't matter.' She asked: 'Do I want to see Freddy? Of course I do. I see Freddy all of the time. I will see him.' One neighbour said: 'I feel sorry for Jackiey. She's been through so much. It's a complex situation. I just hope they can be all together again as a family. Her grandchildren mean the world to her.' They added: 'How did it come to this that lawyers are apparently involved? She wants to be the best gran she can be to those boys.' It was reported that Jeff has launched legal action in a bid to keep Freddy 'safe' from Jackiey. According to The Sun Jeff is now attempting to block any contact between his youngest son and grandmother, 68, claiming the relationship has been 'incredibly detrimental'. He is also said to have hired a top barrister for the upcoming hearings with a source insisting Jeff's actions prove just how 'concerned' he is.
Reuters
32 minutes ago
- Reuters
UK 'deeply concerned' about jailed Egyptian-British dissident's hunger-striking mother
LONDON, June 3 (Reuters) - The British government said on Tuesday it was "deeply concerned" about the health of the mother of jailed Egyptian-British dissident Alaa Abd el-Fattah, Laila Soueif, who has been admitted to hospital while continuing a hunger strike. Soueif, 69, a mathematics professor from a family of prominent activists and intellectuals, was taken to a London hospital last week and has said she is prepared to die to help secure the release of her son from prison. A spokesman for British Prime Minister Keir Starmer said the government was worried about Soueif's health and continues to urge the Egyptian government to release her son. "We are deeply concerned by Laila's hospitalisation and remain in regular contact with her family regarding her welfare," Starmer's spokesman told reporters. The Egyptian embassy in London did not immediately respond to a request for comment. Abd el-Fattah, a software developer and blogger who rose to prominence as an activist in the 2011 Arab Spring, was jailed for five years in Egypt in 2021 over a social media post, a sentence that followed several previous spells in prison, including before and after the uprising. Starmer's spokesman said the British foreign secretary David Lammy spoke to his Egyptian counterpart on Sunday and urged him to release Abd el-Fattah. "The government is absolutely committed to Alaa Abd el-Fattah's release," he said. "Further engagement at the highest levels of the Egyptian government continues." Abd el-Fattah was sentenced to five years in prison in 2021 on charges of spreading fake news, for sharing a social media post about the death of a prisoner. The accusation is commonly levelled at critics of the government and activists who post on social media.
