The key indicators that have usually convinced the Bank of England to cut interest rates suggest the first cut could come in Q1 2024. That said, rates have risen to a lower peak than most models suggest, which implies they need to stay higher for longer to compensate. And the Bank will want to be absolutely sure CPI inflation returns to the 2% target sustainably. So we think that rate cuts are more likely late in 2024 than in the first half of next year.
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