Dr Muhammad Ali Nasir quoted on Bank of England Interest Rate Cuts
Dr Muhammad Ali Nasir supports UK interest rate cuts, highlighting growth concerns and risks in the debate on monetary policy.
A recent article in The i Paper explores the Bank of England’s controversial decision to cut interest rates to 4 per cent, the lowest in more than two years, despite forecasts that inflation will remain double the Bank’s 2 per cent target into the autumn.
The Monetary Policy Committee’s decision has divided economists. Some argue that the move is premature, given that inflation remains above the 2 per cent target. In contrast, others contend that the Bank should focus on future projections, as monetary policy typically works with a time lag of a few years on inflation.
Among those supporting the decision to cut interest rates is Dr Muhammad Ali Nasir, Associate Professor of Economics at Leeds University Business School. He states that persistent high interest rates may be suppressing growth at a time when the UK economy needs support.
The UK economy needs growth, and that is not possible with the current level of interest rates.
He also pointed to broader pressures weighing on the UK economy:
The growth outlook is also bleak, and the unemployment rate is expected to rise a little bit with this weak growth.
On top of that, there is also uncertainty in the global economy with trade wars and geopolitical tensions which may further dampen the growth.
Dr Nasir’s insights added important economic context to the discussion, highlighting why interest rate cuts may be a necessary step to support growth amongst ongoing domestic and global pressures.
