Free Trial

MNI INTERVIEW: BOE Faces Deeper Rate Cuts On UK Savings Impact

(MNI) London
(MNI) London

Dominant fixed rate mortgages in the UK and relatively robust household finances required more tightening and, now, deeper rate cuts, Resolution Foundation Economist says.

The Bank of England faces making deeper interest rate cuts because it confronts a reversal in the boost to savings from positive net interest income flows that has hampered the tightening cycle started in late 2021, Simon Pittaway, senior economist at the Resolution Foundation and, formerly, the BOE, told MNI.

The predominance of fixed-rate mortgages, contributing to relatively robust household finances, has resulted in positive net interest income flows to households which have weighed against the policy tightening, Pittaway points out.

Keep reading...Show less
649 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.

The Bank of England faces making deeper interest rate cuts because it confronts a reversal in the boost to savings from positive net interest income flows that has hampered the tightening cycle started in late 2021, Simon Pittaway, senior economist at the Resolution Foundation and, formerly, the BOE, told MNI.

The predominance of fixed-rate mortgages, contributing to relatively robust household finances, has resulted in positive net interest income flows to households which have weighed against the policy tightening, Pittaway points out.

Keep reading...Show less