For an updated and more detailed version of this analysis, click here.
The Bank of England was always going to continue its cut-hold-cut-hold pattern by leaving interest rates at 4.50% today but, in the opposite of what happened at the last meeting in February, the vote was more hawkish than expected. This increases the possibility that as inflation rises later in the year, the Bank cuts rates even slower. Even so, we still think the Bank will eventually reduce rates to 3.50% rather than to the low of 4.00% investors expect.
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