UK's central bank warns high rates may hurt growth and push inflation below target.

Keeping interest rates high for too long could harm economic growth and jobs, potentially pushing UK inflation below the 2% target, warned Bank of England Deputy Governor Sarah Breeden. Speaking at Cardiff Business School, she described the current inflation rise—driven by higher food prices—as a temporary "hump" rather than a sign of a broken disinflation trend. Despite inflation peaking at 4%, Breeden expressed confidence the central bank’s path would return prices to target over time. The Bank recently held rates at 4%, with Breeden voting in favor, as concerns over persistent inflation have softened expectations for near-term rate cuts.