Bank of England expected to cut interest rates

"Policymakers at the Bank of England are expected to cut interest rates - bringing the Bank rate down to its lowest level since February 2023. Analysts are widely predicting a fall from 4% to 3.75%, although they do not expect a unanimous decision among the nine-member Monetary Policy Committee (MPC). This would be the sixth cut in interest rates from August last year."

"The latest inflation data, published on Wednesday, showed a bigger drop to Consumer Prices Index (CPI) inflation than analysts had been expecting. The rate of CPI fell to 3.2% in November, from 3.6% in October, the Office for National Statistics (ONS) said. While inflation remains above the Bank's target, the latest fall in the rate and signs of rising unemployment and a relatively stagnant economy are likely to push the committee towards an interest rate cut."

"At the previous meeting in November, the four members of the MPC who voted for a cut were only just outvoted by the five who wanted to keep rates on hold. At the time, the Bank's governor, Andrew Bailey, said he would "prefer to wait and see" whether inflation continued to drop back. James Smith, developed market economist for ING, said the sharp drop in the November rate of inflation "green lights" a rate cut."

Policymakers at the Bank of England are expected to reduce the Bank rate from 4% to 3.75%, which would be the sixth cut since August. The nine-member Monetary Policy Committee is not expected to be unanimous on the decision. The Bank rate affects consumer borrowing costs and savers' returns and serves as the main tool to reach the 2% inflation target. Consumer Prices Index inflation fell to 3.2% in November from 3.6% in October, and signs of rising unemployment and a stagnant economy raise the likelihood of a rate cut. Some economists forecast further cuts early next year.

Read at www.bbc.com