The Bank of England's decision to leave UK interest rates on hold at 5.25%, a 16-year high, has been slammed as "disappointing but unsurprising" by Nigel Green, CEO of deVere Group, one of the world's largest independent financial advisory and asset management organisations.
The comments from Nigel Green come after Wednesday's fall in inflation back to the BoE's 2% target, which gave its monetary policy committee (MPC) a good reason to consider cutting rates, to take some of the pressure off borrowers and the UK economy.
"While the decision to maintain the current interest rate level is disappointing, it is not entirely unexpected," he states.
"The MPC has missed an opportunity to alleviate some of the financial strain on households and businesses.
"With inflation now back at the target level, there was a strong case for a rate cut to support economic growth and provide some relief to those struggling with high borrowing costs."
The deVere CEO continues: "High-interest rates, while a tool to combat inflation, also pose significant challenges to economic growth, especially when inflation has already been reined in.
"The MPC's decision suggests a cautious approach, perhaps too cautious, given the current economic landscape."
The deVere Group CEO emphasised the broader implications of the BoE's stance.
"High borrowing costs continue to impact consumer spending, business investment, and overall economic momentum. For many borrowers, especially first-time homebuyers and small businesses, the prolonged period of elevated interest rates is particularly burdensome.
"A reduction would have signalled confidence in the economy's resilience and provided a much-needed boost."
Green acknowledged the factors influencing the MPC's decision. "It's clear that sticky core inflation and the upcoming election likely swayed the MPC towards holding rates steady."
Nigel Green also highlighted the importance of balancing inflation control with economic growth.
"Monetary policy should not only focus on keeping inflation in check but also on fostering an environment where the economy can thrive.
"With inflation now at the BoE's target, a cut in interest rates would have been a balanced approach, addressing both price stability and growth."
Looking ahead, the deVere CEO urges the MPC to remain agile and responsive to changing economic conditions.
The decision-making process, he says, must be dynamic, reflecting real-time economic indicators.
Nigel Green concludes: "The Bank must now do the right thing and cut rates at their next meeting in August to support the economy and households across the UK.
"The risks of not cutting rates are far greater than the risks associated with maintaining the current rate level."
