The Shadow Monetary Policy Committee, aligned with the Institute of Economic Affairs, calls for interest rate cuts from the Bank of England amid concerns of economic slowdown. They highlight a troubling contraction in the UK's 'Broad Money' supply, forecasting potential recession risks if monetary growth does not improve. While some members advocate for a modest rate reduction, a general consensus emerges on the need for more decisive actions to stabilize the economy and address previous policy errors of overshooting monetary growth.
The Shadow MPC's view remains that the Bank of England has made a serious mistake, over-compensating, by keeping policy too tight for too long.
Growth in the UK's 'Broad Money' (M4) supply slowed dramatically in 2023, bringing subsequent inflation down and reducing credit availability.
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