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A brief pause

Disagreement on the Monetary Policy Committee (MPC) has intensified between those members who are more worried about the near-term inflation outlook and those whose concerns centre on the weakening growth prospects. We think that inflation concerns will trump at May’s meeting, meaning that rates stay at 5%. However, we should only have to wait until June for another cut. And we still think that rates will eventually fall to 3.5% or even lower.

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