BOE’s Bailey Says Budget Tax Rises Support Gradual Rate Cuts
- Governor warns of ‘lingering persistence’ of wage pressures
- Chancellor Reeves raised employer national insurance in budget
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The UK Labour government’s tax increases reinforce a gradual approach to easing interest rates, Bank of England Governor Andrew Bailey said.
Employers could choose to react to the hike in their National Insurance contributions — which lifts the cost of employment — by raising prices charged to consumers, absorbing the costs themselves, reducing the pace of wage rises or by cutting hiring, Bailey said on Tuesday in his annual report to Parliament’s Treasury Select Committee.