An external member of the Bank of England’s Monetary Policy Committee (MPC), Swati Dhingra, has warned that keeping interest rates high for too long may be damaging the UK economy’s future capacity to grow. Her concern adds to the complexity of rate decisions, already impacted by global trade uncertainty.
Dhingra, a trade expert, has consistently voted for lower rates than the MPC has set, suggesting a more aggressive approach to cuts may be needed. She indicated that if policy has been overly restrictive, she might support larger “decrements” in future meetings.
Despite these internal debates, Bank Governor Andrew Bailey reiterated his expectation for a slowdown in UK wage growth in the coming months. This anticipated moderation in wage settlements remains a crucial element for the MPC as it assesses the potential for further rate cuts.