Bank of England Governor Andrew Bailey is “crippling” households with high interest rates, a former advisor to the central bank has claimed.
Dr Roger Gewolb told GB News he thought Mr Bailey and his “thick skinned colleagues” are acting too “slowly” to cut rates and are following the actions of other central banks, such as the Federal Reserve.
The Bank of England has raised the base rate over a dozen times in the last year and a half to rein in in inflation, and has held the rate at a 15-year high since September 2023.
While the Consumer Price Index (CPI) rate has eased in recent months, interest rates are not expected to be cut until at least the summer, according to analysts.
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Appearing on Breakfast with Stephen and Ellie, Dr Gewolb said: “I think they really should be reducing it now. Inflation is falling, despite a small blip for cigarettes and alcohol in December.
“They [the Bank of England] are still strangling the economy. I meet people everywhere whose mortgages have gone up by £1,000 a month. Just terrible stories.
“Allegedly, Mr Bailey has a track record both at the Financial Conduct Authority (FCA) and at the Bank of doing things too slowly.
“He waited too long to start to raise interest rates. Then dumped quantitative easing, printed money all over. It was like pouring oil on a Californian forest fire.”
According to ex-Bank of England advisor, if the Governor waits to long to slash interest rates, further damage could be done to the economy.
When asked whether Mr Bailey was anticipating fiscal consequences from the Houthi attacks on Red Sea vessels, Dr Gewolb dismissed these concerns.
He added: “How will crippling us on our mortgages, our food, our energy, stop from the Houthis from shooting at Red Sea shipping?
According to Dr Gewolb, “this Bank of England is the worst management of British monetary policy” in years.
The Bank of England has raised interest rates to combat inflation
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The Bank of England boss is under fire for recent decision making
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The former central bank advisor noted that keeping interest rates at a high level at a time of rising wages will “compound” the UK’s existing cost of living problem.
Despite his concerns for the economy, Dr Gewolb highlighted that mortgage lenders have become more competitive with rates recently as property prices have dropped.
Analysts are betting on the Bank of England to cut interest rates in the latter half of 2024.
The Bank of England is expected to make an announcement regarding the country's base rate at midday today.