The Bank of England may have to cut interest rates rather than raise them as its next move because of the risks of inflation remaining low and a crisis in emerging economies hurting world growth, BoE Chief Economist Andy Haldane said on Friday.
He said in a speech that softening employment figures and weakening surveys on manufacturing and construction output suggested growth in Britain was slowing in the second half of the year and inflation might not pick up as expected.
Furthermore, problems in emerging markets could drag on growth in Britain and the headwinds for those economies were unlikely to abate any time soon, Haldane added.
“The balance of risks to U.K. growth, and to U.K. inflation at the two-year horizon, is skewed squarely and significantly to the downside,” Haldane said.
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