Rachel Reeves’s plans for growth suffered a double blow after the Bank of England halved its forecast for the year and warned households would face mounting pressure from rising prices.
In a downbeat assessment as it cut interest rates for a third time in six months, Threadneedle Street warned people would face a fresh squeeze on living standards from rising inflation even as the economy stalled.
Cutting rates by a quarter of a point to 4.5%, the central bank’s heightened concern was underscored by a steep downgrade in its 2025 growth forecasts. It now expects the economy to grow by just 0.75% this year, compared with a previous forecast of 1.5% made in November, in a fresh blow for Reeves as she battles to revive confidence.
A week after the chancellor gave a major speech to restate the government’s commitment to growth, the Ba...
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