It’s close, but BoE to keep rates on hold for a little longer

While it will be a very close call, the economy’s recent strength and the stickiness of services inflation leads us to think that the Bank of England will wait until its September meeting to cut interest rates from 5.25% to 5.00%. But if we are right in thinking inflation will be weaker than the Bank expects, then we still think rates will be cut to 3.00% next year, rather than to 4.00% as investors anticipate.

We’ll be discussing the outlook for Bank of England, ECB and Fed policy in a 20-minute online briefing at 3pm BST on Thursday 1st August. (Register here.)