The Bank of England sprung no surprises, leaving interest rates at 5.25% for the third time in a row and pushing back against the prospect of near-term interest rate cuts. While the recent soft wage and inflation data mean the Bank may not wait as long as our forecast of late in 2024 to cut rates, we are still convinced that the Bank will cut rates later than the Fed (Q1 2024) and the ECB (Q2 2024) and current UK market pricing of May. And we still think that when rates are cut, they will be reduced to 3.00% by the end of 2025 rather than to 3.50% as investors anticipate.
Note: We’ll be discussing the Fed, ECB and Bank of England December decisions and the policy outlook for 2024 in an online briefing at 3pm GMT today. Click here to register for the 20-minute session.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services