Policymakers still cautious on early cuts, although the first could yet come as soon as June.
21 March 2024
The Bank of England (BoE) shocked no one in their latest meeting on interest rate policy, holding at 5.25% for the fifth time in a row. Two of the members who previously called for rate hikes at February’s meeting now fall into line with the broader eight-member consensus advocating no change in policy, with one member still arguing for a rate cut.
Echoing the Federal Reserve’s more cautious outlook on inflation, the BoE seem not yet overly convinced they are at a point where cuts should be deployed. However, markets are pricing in a little over 80 basis points of cuts this year, with the first possibly coming in June. Inflation prints will have to come in shallow over the next few months for that eventuality and it is possible they will, although it is by no means a slam dunk.
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