Bank of England believes that interest rates are “down”

The Governor of Bank of England, Andrew Billy CNBC on Tuesday that “the interest rate path will continue to decrease gradually,” as the central bank arms the inflation and destroyed economic growth.

“I have not changed my opinion on that,” said Annette Weshbach of CNBC in Sentra, Portugal, where the European Central Bank will hold the forum. “But with regard to Payne, we will go at the next meeting? Well, we will see.”

Economists expect that policy makers will reduce the rates of 25 basis points in their next gathering in August, which will take the basis for the central bank from 4.25 % to 4 %.

But Boe’s Bailey told CNBC that policy makers need to measure whether continuous inflationary pressures, such as averages that exceed inflation and high energy prices, will continue to soften them.

“For me, the main question is that the softening that we started to see will come and create the context in which inflation will return to the goal?” to caution.

The Bank of England has the target of inflation by 2 %, but the high prices exceeded this level, The decline of 3.4 % in May – Many highest surrounding euro area Inflation printing From 2 % in June. At the same time, growth is still far -reaching, With the British economy shrinking sharply in April With the outbreak of global trade tariffs and the new local tax height.

UK Finance Minister Rachel Reeves – which last autumn I entered the tax increases Companies to largely finance the huge public spending program – he said that the latest growth data was “clearly disappointing”.

It also responded to reading inflation in May by insisting that the Treasury Ministry has taken “options necessary to achieve stability in public financial resources and control inflation”, with reference to its “financial rules” that dictate that daily government spending will not be funded by borrowing.

While the “non -negotiable” bases were determined last October, economic and financial expectations in the UK have become more challenging, with interest payments for debt and the weakest tax receipts expected with the low economic growth expectations. behind In MarchThe Independent Budget Office said it expected the UK to record 1 % growth this year and 1.9 % in 2026.

Counselor Reeves acknowledged that there is “more to do” because the government is strongly seeking to enhance growth in the British economy.

In order to achieve this while adhering to its financial rules, REVES was mainly left with three options: reduce public spending, increased borrowing or taxis.

Economists are

Central banking policy makers tend to get rid of the commentary on governments financial policies to avoid interference or bias. However, Billy told CNBC on Tuesday that although it is important that Reeves “has set a very clear financial frame”, there should be “a suitable amount of flexibility in it.”

He said: “The United Kingdom has obtained a financial framework that the consultant has often discussed it. I know that the advisor is very committed to the existence of a strong financial policy, and this is important as the background of the stability of the macroeconomic.”