Bank Of England Signals Imminent Rate Cuts: 'More Than Currently Priced Into The Market'
The Bank of England (BoE) kept interest rates unchanged at 5.25% at its May meeting. Market participants anticipated this decision, which reaffirms the commitment to returning inflation to the 2% target.
The decision was made with a 7-2 split in the vote. Monetary Policy Committee (MPC) members Swati Dhingra and Dave Ramsden dissented, advocating for a rate cut.
However, the most significant news stems from the updated BoE’s economic projections and Governor Andrew Bailey‘s comments.
The BoE now anticipates that headline inflation will decline to 1.9% in two years and to 1.6% in three years. This forecast indicates that price pressures are expected to fall below the target over the monetary policy horizon.
As such, Bailey adopted a dovish tone during the press conference. The bank will likely need to cut rates “over the coming ...
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