Expectations of a rate cut to 4.25% as markets focus on future policy hints
The Bank of England (BoE) will announce its latest monetary policy decision on Thursday afternoon, and markets widely expect the central bank to cut its benchmark interest rate by 25 basis points to 4.25% from 4.50%, by a vote of 9 to 0 (although dengra may vote in favor of a 50 basis point cut). This is widely expected, as the Bank of England reiterates that a quarterly cut is its preferred plan, although inflation remains above the target of 2.6%, after a recent decline from 2.8%.
The decision of the monetary policy committee will be attached to the minutes of the meeting and the monetary policy report, and the focus will be on the wording of the statement and the possibility of changing directions with caution, while Governor Andrew Bailey will address reporters at a press conference following the decision.
Traders are waiting for his statements in search of any change in his tone, especially regarding inflation risks, the possibility of imposing customs duties, and the likely timing of future interest rate cuts.
On the other hand, the governor of the Bank of England, Andrew Bailey, stressed that Trump's trade attack could damage the British economy even if the country avoids imposing the largest tariffs.
According to media reports, London is currently negotiating with Washington on a trade agreement, which may reduce duties in exchange for easing the British digital services tax paid by US tech giants.
