As the Bank of England scrambles to unwind the disastrous effects of quantitative easing, the hidden costs of this policy are becoming clear, says Damian Pudner Quantitative easing (QE) has long been the Bank of England’s monetary policy nuclear option.

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The Bank of England's Monetary Policy Committee (MPC) uses interest rates to put a brake on the nation's spending.

Latest data from the Office for National Statistics ( ONS) showed regular earnings up 5.6% in the quarter, up from, 5.2% in the previous three months. In real terms, after taking inflation into account, that means regular pay growth rose 2.5%, the highest rate since the summer of 2001.

The Bank of England will cut interest rates four times this year to support a flat-lining economy, economists polled by Reuters said, but they added that risks to inflation are to the upside, suggesting policymakers may end up doing less.

Wage growth increased by 3.4% after taking into account inflation, driven by strong increases in the private sector.

Alan Taylor, the most recently appointed member of the Bank's monetary policy committee (MPC) said the UK is 'in the last half mile on inflation' and called for a pre-emptive cut

The fall in the headline rate of inflation from 2.6 percent to 2.5 percent was unexpected and positive news for the Chancellor Rachel Reeves.

However, it means the Consumer Prices Index (CPI) - the main measure of inflation - remains stubbornly above the Bank of England’s target of 2%. The Office for National Statistics (ONS ...

Markets are significantly underestimating the chance that the Bank of England will have to step up the pace of cutting interest rates.

Core inflation, which strips out the direct impact of volatile energy and food prices is now at a four-year low, having dropped to 3.2% in December from 3.5%. Services inflation is at a two-year low of 4.4% after a chunky fall from 5%. This is the real positive news.

The Bank of England should move quickly to bring down interest rates given signs of a slowdown in Britain's economy, Alan Taylor, the BoE's most recently appointed interest rate setter, said on Wednesday.