The Bank of England will almost certainly leave interest rates at 5.25% on Thursday 9th May and we suspect it will imply it’s still not quite ready to cut rates. That said, there’s a chance it instead indicates that the first rate cut will be in the coming months. Either way, our forecast that inflation will fall faster than the Bank expects may mean rates are first cut in June and fall to 3.00% next year. That compares to market pricing for an August cut and a low of just 4.00%.
We’ll be discussing the outlook for Bank of England policy in a 20-minute online briefing at 3pm BST on Thursday 9th May. (Register here.)
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