Tuesday 26 May 2026 4:29 am  |  Updated:  Monday 25 May 2026 11:53 am

End quantitative tightening now

By: Damian Pudner

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Ending active quantitative tightening is not monetary loosening. The Bank must stop adding avoidable pressure to the gilt market, writes Damian Pudner

The Bank of England’s Monetary Policy Committee meets on 18 June. It should hold Bank Rate at 3.75 per cent. But it should also go further: it should announce the end of active quantitative tightening.

It’s an easy case. The British economy is not overheating. It’s an economy running on fumes. Unemployment has risen to five per cent and is likely to move higher. Vacancies have fallen to 705,000, their lowest level in five years. There are 100,000 fewer people on payrolls in April compared with March. Regular pay growth has slowed to 3.4 per cent, with real wage growth barely positive once inflation is taken into account. 

Monetary policy works with long and variable lags. Previous rate rises are still passing through the economy. Mortgage refinancing is still biting. Business borrowing costs remain elevated. Consumer confidence is weak. Forward-looking business surveys like the Purchasing Manager’s Index........

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