The dramatic events of the past few weeks have changed the debate from whether the Monetary Policy Committee (MPC) will cut interest rates this year to whether it will cut them in October or November. The debate is finely balanced and the deciding factor could be any further twists and turns in the financial markets. But at the moment, we think that a November rate cut is marginally more likely. Either way, the next cut in rates is likely to be the first in a series that takes them all the way down to at least 3.5%.
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