From CNBC: 2024-03-20 08:56:39

The Bank of England expected to maintain 5.25% interest rate amidst economic slowdown. Inflation drops to 3.4% in February, lowest since September 2021. UK economy in recession since end of 2023, with two years of stagnation due to gas supply shock from Russia-Ukraine conflict.

Economists predict possible rate cut in June, hinting at first reduction in interest rates. MPC to decide on timing of policy change based on May update. Expectation of 5 cuts from Bank, with main rate at 4% by year end. Insight from economists suggest rates may exceed inflation for next two years.

Concerns over UK labor market risks supporting inflation, despite recent data showing slower wage growth, rising unemployment, and decreasing job vacancies. Services inflation still a concern, may delay rate cut to August. MPC needs further evidence on inflation moderating before deciding on rate cut.

Moody’s Analytics also cautious, mentioning uncertainty around rate cut timing. Services inflation and wage growth need to decrease further before interest rate cut. Anticipating easing in first half of year, with potential rate cut announcement in August. Uncertainty remains on timing and extent of rate cuts in 2024.

Read more: Bank of England set to hold rates, but falling inflation brings cuts into view