Abacus Daily Debt News

Bank of England “burying its head in the sand”

The Bank of England has been accused of "burying its head in the sand" over the global economic turbulence.

Michael Baxter, an economist at Defaqto, said that the Bank may not have "correctly diagnosed" what is happening in the financial markets.

He also criticised the European Central Bank, saying that it must do more in order for organisations such as the Bank of England to take action over the slowdown.

And he claimed that the chances of interest rates falling to zero - which could be beneficial for borrowers, particularly those on base rate tracker products - in the UK are "more likely than not".

"I think the speed at which we get to zero is as much down to what the European Central Bank does," Mr Baxter added.

The Bank of England’s monetary policy committee is due to announce a further decision on interest rates - which currently stand at one per cent - next Thursday following its monthly meeting.

By Jamie Price