BOE’s Chief Economist Says May Need to Cut Rates

The Bank of England’s chief economist said Friday it may be necessary to cut interest rates in the U.K. to get inflation back to target, a stance that puts him at odds with governor Mark Carney’s view that borrowing costs will likely need to rise soon.

Andrew Haldane said in a speech in Portadown, Northern Ireland, that in his view, the case for a rate increase is “some way from being made,” given the weakness of inflation in the U.K. and signs of a slowdown in growth.

He said the risks to growth and inflation are “skewed squarely and significantly to the downside,” according to a text of his speech, and that if price growth doesn’t accelerate “there could be a need to loosen rather than tighten the monetary reins as a next step to support U.K. growth and return inflation to target.”

Mr. Haldane’s remarks show that divisions remain among BOE officials over the need to change course after almost a decade of holding interest rates at a record low.

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