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Cautious: the Bank of England’s Huw pill
The Bank of England’s chief economist has warned that the time for an interest rate cut is “still some way off” even as inflation falls.
Huw Pill warned against “luding into a false sense of security” as inflation looks set to “approach or even fall below” its 2 per cent target this spring.
But he suggested some rate cuts could come while still keeping a tight rein on inflation.
Yesterday’s figures showed house prices have returned to growth for the first time in a year in the latest sign of a recovery in the property market ahead of the Budget.
Prices in February were 1.2 per cent higher than the same month last year, according to lender Nationwide, thanks to falling mortgage rates.
Nationwide figures showed house prices rose 0.7 per cent between January and February to an average of £260,420.
Figures from the Bank of England this week showed a rebound in mortgage approvals in early 2024.
Meanwhile, monthly UK Purchasing Managers’ Index (PMI) data yesterday showed another month of decline for the manufacturing sector.
However, the PMI reading of 47.5 for February (where the 50 mark separates growth from contraction) was a ten-month high.