Bank dismisses hopes of big interest rates cut this year

Rachel Reeves has suffered another blow in her bid to boost tepid economic growth after the Bank of England played down the idea of a big interest rate cut later this year.

- KATE DEVLIN

Huw Pill, the Bank's chief economist, pointed to a more "careful" approach instead. His comments came just a day after the bank’s decision to halve its growth forecast overshadowed news of a smaller interest rate cut.

In another setback for the chancellor, the Bank also warned inflation is now expected to rise higher than previously estimated, to 3.7 per cent, and more people will be out of work, as firms deal with higher taxes and an increase to the minimum wage.

The growth downgrade was described as a “wake-up call” for Ms Reeves, whose future in the role is being questioned.