Caution: Bank of England’s former chief economist Andy Haldane
The Bank of England’s former chief economist has suggested a pause in interest rate hikes with the economy on ‘relatively unsteady legs’.
Andy Haldane cautioned on the risk that raising rates too far could threaten the recovery.
Data shows Britain narrowly avoided recession at the end of last year, with GDP growing by 0.1 per cent in the fourth quarter.
But it remains 0.6 per cent below its pre-pandemic level and experts foresee a bumpy road ahead even with inflation expected to slip back.
Haldane told The Sunday Times: ‘I think given the extent of the tightening we had during the course of last year, and the early part of this, and given the economy is still on relatively unsteady legs, now might be a time to pause and take stock for a bit.’
Economists argue it can take some time for the impact of interest rate hikes, or tightening, to filter through to the real economy.
The rapid series of hikes has seen the Bank’s rate climb from 0.1 per cent in December 2021 to 4.25 per cent today.
Haldane, now chief executive of the Royal Society for Arts, was chief economist at the Bank of England from 2014 to 2021 and a member of the MPC.
