The Bank of England has indicated it is preparing a ‘significant monetary policy response’ to Kwasi Kwarteng’s mini-budget.
The Bank’s chief economist Huw Pill warned they ‘cannot be indifferent’ to the developments of the past days Kwasi KwartengAfter a day of turmoil in the markets, the Chancellor sought to reassure City investors he was ‘confident’ his tax-cutting strategy will deliver the promised economic growth.
But with some analysts predicting the base rate – currently standing at 2.25% – will have to rise to as high as 6% next year, some lenders began withdrawing some mortgages amid uncertainty over how far they will rise. He also emphasised the importance of the ‘supply side’ reforms ministers will be setting out in the coming weeks, including his ‘Big Bang 2.0’ reforms to further liberalise the financial market regulations, in supporting growth.