Bank of England (BOE) monetary policymaker Alan Taylor, in his annual report to the Parliament’s Treasury Select Committee, stated that the UK economy is approaching a “soft landing” phase.
However, at the same time, the UK economy is seen to be in a fragile state.
Soft landing means the central bank’s action to lower inflation without causing an economic collapse or a major recession.
Although it has previously experienced many challenges, the situation is now moving towards stability but monetary policy needs to be planned very carefully in the coming months.
Recently, the BOE has cut interest rates by 25 basis points, from 4.25% to 4.00%, with MPC members voting 5-4.
Taylor initially proposed a larger cut to 3.75%, but changed his position in order to achieve a majority supporting a reduction to 4%.
Taylor stressed that the main priority is to bring inflation down to the 2% target level sustainably by maintaining policies that are appropriate to contain inflation while at the same time preventing the economic balance from deteriorating.
