Investors’ growing expectations that the US Fed will cut interest rates in March next year, as well as the recent soft UK wage and inflation data, have convinced investors that the Bank of England will start cutting interest rates sooner, in May 2024 instead of August. While the recent soft UK wage and inflation data mean the Bank may not wait as long as our forecast of late in 2024 to cut rates, we still think lingering price pressures will mean the Bank will cut rates later than the Fed (Q1 2024), the ECB (Q2 2024) and current market pricing of May.
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