Pressure rises on Bank of England and the Fed as the interest rate debate gets political

The Bank of England is set to announce a reduction in UK interest rates, likely lowering from 4.75% to 4.5%. This comes as global central banks, particularly the US Federal Reserve, face scrutiny from political figures like Donald Trump. While the US maintains strong economic growth, Trump advocates for lower borrowing costs. Concerns arise regarding the influence of political pressures on central bank decisions, with European Central Bank President Christine Lagarde cautioning against such interference. Amidst these dynamics, the Bank’s governor Andrew Bailey grapples with the potential repercussions of a continued economic slowdown.

Bailey and his colleagues on the monetary policy committee (MPC) are considering whether a slowdown in economic growth is going to persist and whether they may be to blame.

Trump's comments appeared to prompt European Central Bank boss Christine Lagarde to warn against political interference in monetary policy or risk inflation racing up again and causing panic in financial markets.

Read at www.theguardian.com