The Bank of England is coming under pressure to cut interest rates after spikes in mortgage costs over the last month.

A group of independent economists who shadow the Bank of England has called for interest rates to be cut substantially and immediately. However, economists are widely expecting the committee to keep rates at the current level of 5.25%, which it has been held at since August last year. The high interest rates have meant homeowners have been saddled with soaring mortgage repayment costs.

The Shadow Monetary Policy Committee (SMPC), hosted by the free market think tank the Institute of Economic Affairs, argues that the UK faces a period of weak growth or even recession if the Bank fails to cut rates aggressively.

The SMPC believes that having successfully curbed inflation, the Bank risks doing serious economic damage by keeping rates too high for too long following a slowdown in the money supply. If the Bank does not speed up the money supply, it increases the likelihood of an unnecessary slowdown and potentially deflation.

The committee expressed concern that the Bank of England has not adequately responded to inflation rates, which are considerably below the Bank’s expectations and set to fall below the Bank’s 2% target imminently.