Bank of England’s chief economist warns time for an interest rate cut is ‘still some way off’

The Bank of England’s chief economist warned that the time for an interest rate cut is ‘still some way off’ even as inflation falls.

Huw Pill cautioned against ‘being lulled into a false sense of security’ as inflation seems set to ‘approach or even fall below’ its 2 per cent target this spring.

But he suggested that some rate cuts could happen while still keeping a tight grip on inflation.

Figures yesterday showed house prices have returned to growth for the first time in a year in the latest sign of a pick-up in the property market ahead of the Budget.

Prices in February were 1.2 per cent higher than in the same month last year, according to lender Nationwide, thanks to falling mortgage rates.

Nationwide’s figures showed house prices climbed by 0.7 per cent between January and February to an average £260,420.

Bank of England figures this week showed an uptick in mortgage approvals at the start of 2024.

Meanwhile, monthly UK purchasing managers’ index (PMI) data yesterday showed another month of decline for the manufacturing sector.

The PMI reading of 47.5 for February – where the 50-mark separates growth from contraction – was, however, a ten-month high.