UK Weekly: Revising down our Bank Rate forecast to 3.00%

Helped in part by the decline in energy prices, this week we have become more confident that the recent loosening in the labour market will eventually reduce domestic price pressures. As a result, we have revised down our forecast for Bank Rate and now expect the Bank of England to cut interest rates all the way to 3.00% next year, which is further than our previous forecast and investors’ expectations of 3.50%.

Next week, we’ll be discussing how the government has influenced the UK economy in its first year in office. Register for in-person Roundtables at our London office on Tuesday 1st July here. Alternatively, register for an online briefing on Thursday 3rd July here.