Interest rates should remain unchanged this summer, says a Bank of England official.
Jonathan Haskel, a policymaker at the Bank of England and a professor at King’s College London, has dismissed the prospect of an interest rate cut this summer, delivering a setback to the new Labour government.
Haskel preferred to keep rates steady at 5.25%, their highest level in 16 years. In an upcoming speech at the Economic Statistics Centre of Excellence, he will highlight concerns about Britain’s tight job market, which could lead to wage increases and potentially fuel inflation.
This stance comes despite inflation falling back to the Bank of England’s 2% target in May. Money markets currently estimate a 65% chance of a rate cut from 5.25% in August, a year after the rate was raised to this level.
Haskel stated, “I would rather hold rates until there is more certainty that underlying inflationary pressures have subsided sustainably.” He added, “The labour market continues to be tight, and I worry it is still impaired.”
