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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