The Bank of England’s former chief economist, Andy Haldane, has cautioned that unless the central bank promptly reduces interest rates to alleviate the financial strain on households amid the cost of living crisis, it risks exacerbating the UK’s recession.

Haldane, previously an advocate for raising interest rates, expressed concern that maintaining borrowing costs at the highest level in 16 years could potentially “crush the economy.”

Recent official figures revealed that Britain entered a recession at the close of the previous year, attributed to consumers tightening spending in response to elevated interest rates and living expenses, The Guardian reported.

In the last quarter of the year, the UK’s gross domestic product (GDP) unexpectedly declined by 0.3%, marked by contractions in all major economic sectors and a significant drop in Christmas-related retail sales, following a 0.1% dip in the third quarter.

According to economic standards, two consecutive quarters of declining GDP define a recession.

Written by B.C. Begley