The Bank of England has reduced its UK growth forecast for 2025 from 1.5% to 0.75%, cutting interest rate on Thursday, in caution and leaving both consumers and businesses concerned about the UK’s economic prospects.
The Chancellor Rachel Reeves is being told that she is “running out of justifications” and she needs to reverse her tax policies.
Mike Salem, UK Country Associate for the Consumer Choice Center (CCC), said, “Reeves is running out of justifications for causing such a sluggish economy.
“Labour has been in charge for seven months now, and we have seen no real positive consequences from their measures to tax everyone and everything.”
Salem added that consumers are worried, and this news will not bode well with those who are saving their money or those who want to spend and invest, leading to this limbo of effectively zero growth.
“The average consumer will suffer from lack of growth by not earning enough, and higher costs due to inflation and taxation. As our consumers gear up for the summer, they will have no cash to spend,” Salem added.
The CCC encourages the government to immediately do the following to reinvigorate the economy by reversing the increase in employer contributions to national insurance.
Also to reduce everyday government spending and drastically cut the already bloated civil service.
Eliminate the cap on energy prices, to encourage competition and a swift reduction in energy costs to curb inflation.
The bank has cut their forecast for economic growth and the economy will just avoid by a narrow margin entering into a recession.
The Bank’s Governor, Andrew Bailey, said: “It will be welcome news that we have been able to cut interest rates again today. We’ll be monitoring the UK economy and global developments very closely and taking a gradual and careful approach to reducing rates further.
“Low and stable inflation is the foundation of a healthy economy and it’s the Bank of England’s job to ensure that.”
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