The UK economy faces challenges with low growth and rising inflation, prompting speculation about an interest rate cut from the Bank of England. The City expects a reduction from 4.25% to 4.0%. Some members of the Monetary Policy Committee favor a deeper cut due to rising unemployment, while others cite inflation concerns as a reason to maintain rates. Guillermo Felices anticipates further cuts following the expected quarter-point reduction. Additionally, the ongoing impact of Donald Trump's trade war is considered, though the direct effects on UK-US trade are limited.
The UK economy is facing challenges with weak performance, rising inflation at 3.6%, and concerns over a trade war, leading to a potential interest rate cut.
The City anticipates a quarter-point reduction in interest rates, emphasizing a 6-3 split decision from the last monetary policy meeting, showcasing differing views.
Guillermo Felices, global investment strategist, suggests a 25 basis point cut is likely, forecasting an additional 50 basis points of cuts over the next three meetings.
The impact of Donald Trump's trade war on the UK is considered limited due to tariffs, although broader global implications are important for the Bank of England.
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