CBI responds to MPC decision on interest rates - February 2025

Alpesh Paleja, Deputy Chief Economist, CBI, said:

“Today’s cut to interest rates was in line with our expectations and reinforces our view of a gradual loosening in monetary policy over this year.

“However, the Monetary Policy Committee are increasingly having to balance conflicting objectives. The CBI’s surveys show that business’ growth and hiring expectations have weakened. But inflation expectations are picking up, exacerbated by the rise in employment costs arising from October’s Budget.

“Therefore, while we still expect a few more rate cuts this year, risks to this forecast are now balanced in either direction. Incoming data over the coming months will be key in determining how the MPC will move next.”