Bank of England holds interest rates: Positive Money response

London, 20 March 2025 - Positive Money responds to the Bank of England’s decision to hold interest rates at 4.5% today. 

Simon Youel, Head of Policy and Advocacy at Positive Money, said: 

“Pausing rate cuts right now because of a small uptick in inflation and Trump’s tumultuous tariff announcements is a huge misstep from the Bank of England, especially when the OECD just downgraded the UK's growth forecast.

“Higher interest rates are squeezing borrowers’ incomes, giving them less money to spend in the real economy, which hinders the government’s growth plans. They’re also holding back investment in vital infrastructure like renewables and retrofits, which are essential for shielding us from price shocks in the future.

“Right now, we need the Bank to bring rates down - possibly at an even faster rate for green projects that will support future price stability. In the long-term, we need a serious reassessment of policy options, because higher rates have been a suboptimal tool in taming the inflation we’ve seen.”

Notes:

• The Bank of England’s full announcement can be found here: https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2025/march-2025?sf218869846=1  

• The OECD downgraded this year’s UK growth forecast from 1.7% to 1.4%, and next year’s from 1.3% to 1.2%: https://news.sky.com/story/tariffs-to-blame-for-slowed-global-economic-growth-oecd-says-13330768 

• The Insolvency Service just reported that some 10,147 people entered insolvency in February, which was 4% higher than in January: https://www.independent.co.uk/money/4-monthly-rise-in-personal-insolvencies-in-february-in-england-and-wales-b2717136.html 

About Positive Money: 

Positive Money is an international research and campaign organisation working to redesign our economic system for social justice and a liveable planet. Set up in the aftermath of the financial crisis, Positive Money is a not-for-profit company funded by charitable trusts and foundations, as well as small donations from its network of supporters. Find out more: www.positivemoney.org