UK Prime Minister Keir Starmer is holding a meeting to “take stock” after the Bank of England halved growth forecasts for this year from 1.5 per cent to 0.75 per cent, according to LBC.
The bank also announced on Thursday that interest rates were cut from 4.75 per cent to 4.5 per cent. The changes came after Chancellor Rachel Reeves confirmed significant tax increases in the October Budget, as well as higher electricity and water prices.
BoE Governor Andrew Bailey backed Reeves’ plans but said they would “take time” to have an effect.
Growth rate in the UK has been low since the financial crisis – addressing those questions is critical, so I very strongly agree with the Chancellor. Structural policies take time to come through.
As the government said there would only be one fiscal event a year in the autumn, it is expected to be an update to MPs rather than an emergency budget setting event.
However, the Chancellor will have to decide how to respond if the £9.9bn (€10.8bn) leeway she spoke of in her October Budget is significantly narrowed.
Meanwhile, Tory Leader Kemi Badenoch accused the Labour Party of “ruining the economy,” adding that the situation was “worrying.”
