A BANK OF ENGLAND official has warned that high interest rates are negatively impacting the economy and living standards in the UK.
Swati Dhingra, a member of the Bank’s Monetary Policy Committee (MPC), said borrowing costs remain too high, discouraging investment and weakening consumption.
Speaking to Bloomberg TV, she highlighted that businesses have been cutting investments due to rising financing costs and broader economic challenges.
“We’re really paying the price in terms of: consumption has been very weak, businesses have been telling us for months that they’ve reduced investment [because] of the broader macro outlook, as well as for the fact that it’s becoming more expensive to finance those investments,” she said.
Dhingra, who has consistently supported lower interest rates since joining the MPC in 2022, argued that the current rate of 4.75 per cent is restrictive and could hinder economic growth.
She called for policy changes to ease pressures on supply capacity, investment, and living standards.
Her comments come ahead of the Bank of England’s next meeting, where further rate cuts may be considered.