Amid a difficult backdrop of a weak prognosis for domestic growth, an impending increase in company taxes, and U.S. President Donald Trump’s unsettling tariff threats, the Bank of England is largely expected to lower interest rates on Thursday.
A 98% chance of a quarter-point rate cut at the February meeting, which would raise the bank rate to 4.5%, was priced into money markets as of Wednesday morning.
Due to “elevated” services inflation of 5% and a headline print of 2.6% in November that was more than anticipated, the BOE decided to hold at its last meeting in December.
While services inflation fell to a 33-month low of 4.4%, that rate has now steadied to 2.5%.
Source (CNBC)