THE Bank of England (BoE) came under criticism today for failing to do more to ease interest rates.

The TUC and economic experts said bigger cuts were needed to breathe life into Britain’s stagnating economy after it reduced the base rate by a quarter of a percentage point to 4.5 per cent.

In a blow to the credibility of Chancellor Rachel Reeves’s growth mission, policymakers also slashed their growth forecasts to 0.75 per cent for this year, down from previous estimates of 1.5 per cent.

Governor Andrew Bailey said the cut will be “welcome news to many,” but that the Bank is “monitoring the UK economy and global developments very closely, and taking a gradual and careful approach to reducing rates further.”

The BoE also said forecasts pointing to a higher-than-expected inflation peak of 3.7 per cent later in the summer are mainly down to higher-than-expected energy prices, as well as rising water bills and bus fares.

Policymakers also said unemployment is set to rise to a peak of 4.75 per cent, up from previous forecasts of 4.5 per cent.

TUC general secretary Paul Nowak said: “This rate cut is badly needed to help lift the economy out of stagnation.

“The BoE must now keep moving with further cuts to support households and businesses in the months ahead.”

Ms Reeves welcomed the interest rate cut but added: “I am still not satisfied with the growth rate,” claiming her “plan for change” would spur growth and raise people’s incomes.

Unite reiterated its call for government investment in infrastructure projects.

General secretary Sharon Graham said: “There are plenty of projects crying out for public investment that will drive growth and create good jobs.

“Grangemouth could become a sustainable aviation fuels refinery, Sizewell C is still waiting for the green light, and we are still not manufacturing our own wind turbines.

“The government has already reshaped its fiscal rules to allow for investment in infrastructure projects. Now it needs to put its money where its mouth is. No investment equals no growth. What are we waiting for?”

Danisha Kazi, head of economics at Positive Money campaign group, said that inflationary costs have been driven by global factors.

She added: “All higher rates have done is deepen the debt of both ordinary households and the government while increasing the cost of long-term cost-cutting measures like retrofits and renewables.”

Carsten Jung, principal research fellow and head of macroeconomics at IPPR think tank added: “Today’s rate cut was therefore much needed, but the BoE is still moving too slowly.”