Will BoE be forced to cut rates this year?

Anna Fedorova
clock

The Bank of England may have to resort to the interest rate cut that Governor Mark Carney alluded to in his Inflation Report speech this morning, according to some market watchers.

Presenting the latest Inflation Report, Carney said the Bank "has the will, means and responsibility" to take further action in case deflation persists, including rate cuts and further QE. Though this is not the Governor's base scenario, some commentators believe deflation will be far worse than the bank expects, forcing it to act on its promises. Nick Dixon, investment director at Aegon UK, said: "The threat of deflation, together with sterling's gains against the euro, have created an unexpected challenge for the BoE, and we could see a 0.25% interest rate, and even a reinjection of...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Economics / Markets

Five key takeaways from the Spring Statement 2025

Five key takeaways from the Spring Statement 2025

OBR growth, ISA reforms and defence

Sorin Dojan
clock 27 March 2025 • 4 min read
Bank of England halts interest rate cuts amid ongoing inflation

Bank of England halts interest rate cuts amid ongoing inflation

As priced in by markets

Sorin Dojan
clock 20 March 2025 • 2 min read
More work needed to tackle inflation as BoE members warn of further market turmoil

More work needed to tackle inflation as BoE members warn of further market turmoil

BoE MPC members spoke at Treasury Committee hearing

Sorin Dojan
clock 06 March 2025 • 2 min read