Former Bank of England chief economist Andy Haldane has warned that Britain’s shallow recession will get deeper if the central bank fails to ease interest rates sooner rather than later.
The BoE could “crush the economy” if borrowing rates stay at the current 16-year highs, Haldane told Bloomberg’s UK Politics podcast
He said: “For me the case for putting in place some upfront, early insurance on the monetary policy side is strong and strengthening, and I’m fearful we leave that insurance a little too late in the year.”
Firing a shot at the current BoE leadership, Haldane added: “It’s one thing to have missed inflation on the way up, which happened; it’s quite another to then have crushed the economy on the way down.
“That double blow to credibility is one if I were a central banker, in my old job, I would be looking to avoid.”
Britain is “looking at a year, at best, of anaemic growth”, stated Haldane.
The UK tipped into a technical recession in the fourth quarter of 2023, with data showing gross domestic product (GDP) contracted 0.3% following a 0.1% fall in the previous quarter.