Accountancy practice Azets reacts to BoE's interest rate reduction
The BoE has announced a decrease in the bank rate from 4.25% to 4%, the lowest rate in two years.
The decision, reached by the nine-member Monetary Policy Committee (MPC), comes against a backdrop of sluggish economic growth. The MPC voted by a majority of 5–4 to reduce the bank rate.
Shop Top Mortgage Rates
Your Path to Homeownership
A quicker path to financial freedom
Personalized rates in minutes
Azets debt advisory head Mark Barrie said: 'Today's reduction makes sense, given rising unemployment, the continuous fall in job vacancies, sticky inflation, spiralling national debt, a dire fiscal outlook and persistent cost pressures since April on business, including the increases in national insurance contributions and minimum wage.
'It was in in early 2023 that the Bank of England's interest rate was previously at 4% – Flowers by Miley Cyrus was a break-up number one in the charts at the time. The economy is wilting and needs nourishment through cheaper borrowing.'
Fractional chief financial officers (CFOs) provider the CFO Centre Group has also reacted to the development.
CFO Centre Group CFO Nevil Durrant said: 'The BoE has a difficult path to navigate whilst headline inflation sat at 3.6% at the end of June, well above its target level of 2%, with inflationary pressures persisting within the economy.
'The BoE must balance this inflationary picture with the sluggish performance of the UK economy over the last 12 months, declining business confidence and recent downward revisions by economic analysts in the growth prospects for the UK.
'The reduction may, in the short term, encourage more businesses to borrow and invest, although those businesses will be looking at other macroeconomic factors and the degree of current uncertainty as bigger drivers in respect of any investment policies.'
The BoE aims to stimulate spending by reducing interest rates, although concerns about persistent inflation, which exceeds the 2% target, remain prevalent.
However, the adjustment is expected to effect borrowing costs for mortgages and loans, the BBC reported.
Rising food prices in particular have raised alarms regarding potential further inflationary pressures in the near future.
BoE governor Andrew Bailey has expressed the view that the current inflation spikes may be temporary, suggesting a general downward trajectory for interest rates.
However, he also recognised the significant uncertainty surrounding the UK economy, describing the rate cut decision as "finely balanced".
The government, including Chancellor Rachel Reeves, has expressed support for the rate reduction, indicating that their policies have played a role in fostering economic stability.
"Accountancy practice Azets reacts to BoE's interest rate reduction" was originally created and published by International Accounting Bulletin, a GlobalData owned brand.
The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
24 minutes ago
- Yahoo
British horseracing to go on strike in protest against rise in betting taxes
LONDON (AP) — British horseracing will stage an unprecedented one-day strike on Sept. 10 to protest a proposed rise in taxes on race betting. The four scheduled meetings that day — at Carlisle, Uttoxeter, Lingfield and Kempton — will not take place after agreements between the owners of the courses and the British Horseracing Authority, making it the first time the sport in Britain has voluntarily refused to race in modern history. The BHA set up the 'Axe the Racing Tax' campaign in response to proposals to replace the existing three-tax structure of online gambling duties with a single tax, with fears the current 15% duty on racing could be increased to the 21% levied on games of chance. Brant Dunshea, chief executive at the British Horseracing Authority, said the strike intends to 'highlight to (the) government the serious consequences of the treasury's tax proposals which threaten the very future of our sport.' 'British racing is already in a precarious financial position and research has shown that a tax rise on racing could be catastrophic for the sport and the thousands of jobs that rely on it in towns and communities across the country," Dunshea said. 'This is the first time that British racing has chosen not to race due to government proposals. We haven't taken this decision lightly but in doing so we are urging the government to rethink this tax proposal to protect the future of our sport which is a cherished part of Britain's heritage and culture." The British government said it was bringing the 'treatment of online betting in line with other forms of online gambling to cut down bureaucracy.' 'It is not about increasing or decreasing rates,' the government said, "and we welcome views from all stakeholders including businesses, trade bodies, the third sector and individuals.' ___ AP sports:
Associated Press
26 minutes ago
- Associated Press
British horseracing to go on strike in protest against rise in betting taxes
LONDON (AP) — British horseracing will stage an unprecedented one-day strike on Sept. 10 to protest a proposed rise in taxes on race betting. The four scheduled meetings that day — at Carlisle, Uttoxeter, Lingfield and Kempton — will not take place after agreements between the owners of the courses and the British Horseracing Authority, making it the first time the sport in Britain has voluntarily refused to race in modern history. The BHA set up the 'Axe the Racing Tax' campaign in response to proposals to replace the existing three-tax structure of online gambling duties with a single tax, with fears the current 15% duty on racing could be increased to the 21% levied on games of chance. Brant Dunshea, chief executive at the British Horseracing Authority, said the strike intends to 'highlight to (the) government the serious consequences of the treasury's tax proposals which threaten the very future of our sport.' 'British racing is already in a precarious financial position and research has shown that a tax rise on racing could be catastrophic for the sport and the thousands of jobs that rely on it in towns and communities across the country,' Dunshea said. 'This is the first time that British racing has chosen not to race due to government proposals. We haven't taken this decision lightly but in doing so we are urging the government to rethink this tax proposal to protect the future of our sport which is a cherished part of Britain's heritage and culture.' The British government said it was bringing the 'treatment of online betting in line with other forms of online gambling to cut down bureaucracy.' 'It is not about increasing or decreasing rates,' the government said, 'and we welcome views from all stakeholders including businesses, trade bodies, the third sector and individuals.' ___ AP sports:
Washington Post
26 minutes ago
- Washington Post
British horseracing to go on strike in protest against rise in betting taxes
LONDON — British horseracing will stage an unprecedented one-day strike on Sept. 10 to protest a proposed rise in taxes on race betting. The four scheduled meetings that day — at Carlisle, Uttoxeter, Lingfield and Kempton — will not take place after agreements between the owners of the courses and the British Horseracing Authority, making it the first time the sport in Britain has voluntarily refused to race in modern history.
