"The Bank of England will be focused on hitting the 2% inflation target here in the UK, and for the time being that means loosening policy. But we shouldn't expect a cascade of rate cuts next year. Previous monetary easing will still be working through the system and greasing the wheels, but fresh stimulus could be in short supply throughout 2026."
"do not begin to bite until 2028-29 and therefore are of relatively little significance in the current interest rate debate"
"That said, we would note that the overall fiscal stance is relevant thanks to previous Budget measures weighing on the economy, notably the continued freeze in income tax thresholds,"
"A rate cut is likely, though it is a closer call than markets think it is. The committee is deeply divided and four out of nine officials are unlikely to vote for the cut."
The Bank of England could lower the base rate from 4% to 3.75%, reducing costs for borrowers. The central bank will focus on returning inflation to 2% and is loosening policy for now, but a rapid series of cuts is unlikely next year. Prior monetary easing will continue to influence the economy, yet additional stimulus may be scarce through 2026. Recent tax measures will not take effect until 2028-29 and therefore have limited relevance for current interest rate decisions. The Monetary Policy Committee is deeply divided, with four of nine officials unlikely to support a cut.
Read at London Business News | Londonlovesbusiness.com
Unable to calculate read time
Collection
[
|
...
]