The Bank of England’s remit is to achieve inflation of around 2 per cent a year, if it falls materially below that level, then cutting rates to push inflation upwards towards the target would be the expected course of action.
A third member of the committee, Gertjan Vlieghe said he would favour an interest rate cut if economic data does not improve quickly.
He told the Financial Times on the weekend (January 12) that he expects there to be a pick up in UK economic activity as a result of the greater level of certainty as a result of Conservative party general election victory, but if this doesn’t happen, then rates will need to be cut.
He said it will be obvious by the end of January whether this has happened or not.
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