Trade union leaders have reacted to the Bank of England’s interest rate cut with a mixture of relief and impatience. Paul Nowak, General Secretary of the TUC, welcomed the reduction to 3.75% but warned that “one cut every now and again isn’t enough.” He described the UK economy as “fragile,” struggling with stagnant demand and failing confidence, and called for a sequence of “quickfire” cuts to turn the tide.
Nowak’s comments highlight the disconnect between the financial markets and the real economy. While the City focuses on inflation targets, unions are looking at the recent GDP figures—which showed a 0.1% contraction in October—and worrying about jobs. The TUC argues that without cheaper borrowing to stimulate investment, the manufacturing and service sectors will continue to stall.
The Bank’s decision was a close 5-4 split, with the dissenters worrying about inflation. However, the external members who backed the cut, Swati Dhingra and Alan Taylor, echoed some of the TUC’s concerns. They pointed to weak consumer spending and a slowdown in the labor market as evidence that the economy needs support now, not later.
Chancellor Rachel Reeves defended the pace of cuts, noting it is the fastest in 17 years. Yet, for workers facing potential layoffs or wage freezes due to the economic slowdown, statistical milestones mean less than job security. The TUC is effectively urging the Bank to prioritize growth over the absolute eradication of inflation.
The pressure is now on the Bank to deliver in 2026. If the economy continues to flatline, the calls from unions and business groups for more aggressive monetary easing will only grow louder. The challenge will be answering those calls without letting inflation out of the bag.