The SMPC believes that having successfully curbed inflation, the Bank risks doing serious economic damage by keeping rates too high for too long following a slowdown in the money supply.
The committee expressed concern that the Bank of England has not adequately responded to inflation rates, which are considerably below the Bank's expectations and set to fall below the Bank's 2 per cent target imminently.
The slowdown risk is driven by the lack of growth in the broad money supply (M4), which turned negative last year, indicating a contraction in credit availability.
#shadow-monetary-policy-committee #bank-of-england #interest-rate-cut #inflation-target #economic-growth
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