ACT NOW TO GIVE BRITAIN HOPE OF NEW YEAR CHEER

Bank of England warned interest rates must be cut ‘quickly’ to kickstart economy

- Martyn Brown

INTEREST rates must be slashed to give the economy a vital kickstart early next year, top Tories insist.

They say urgent action is vital to avoid a damaging recession.

The rallying cry comes as a major report today warns high-interest rates have weakened economic output and driven down house prices.

Experts at the widely respected Centre for Economics and Business Research said the approach had also stifled investment. Former Cabinet minister John Redwood blamed the policy of the Bank of England, led by Andrew Bailey, for Britain's economic woes and called for rates to fall next month.

He said: "The Bank has a broken model which has been so wrong on inflation. This has led them to lurch from far too easy to too tight on money and interest rates. Their current policy threatens us with an unwanted recession after avoidable high inflation." Fellow Conservative MP Jake Berry has previously accused the Bank of being "asleep at the wheel" for not putting interest rates up quickly enough to tackle soaring inflation. He said: “I hope they don’t make the same mistake of inaction by not bringing them down.”

The base interest rate has been pegged at 5.25% for the past three months with the Bank warning it will not fall until the middle of 2024 as the inflation fight continues.

But calls for the BoE rate-setters to wield the axe much sooner intensified after inflation unexpectedly plunged to 3.9% last month – the lowest in more than two years.