The Bank of England is expected to reduce the main interest rate later today, moving from 4.75 % to 4.5 %, in an attempt to counter slow economic performance in the UK.
Many analysts refer to the most softened gross domestic product numbers and the decline in inflation as the drivers centered behind the potential reduction, although the bank’s mandate to maintain inflation by 2 % is still far from MET.
After the inflation dropped to 2.5 % in December, speculation intensified about lowering prices – even though the main number still exceeds the bank’s official goal. Governor Andrew Billy noted that any additional discounts this year will be “gradual”, without adhering to specific timing or sizes. The bank’s monetary policy committee (MPC) will also publish a new look at midday inflation, and may provide evidence of its future strategy.
Excessive concerns of inflation by US President Donald Trump – and a threat – exacerbated the new customs tariffs, which can rise in global prices and hesitate through supply chains to the United Kingdom. However, some economists argue that high wages growth, instead of definitions, is likely to constitute the bank’s decisions.
Meanwhile, the British economy is struggling with stagnant growth numbers, as a few or non -existent in the past three months of 2024. To add to work costs, which is likely to restrict employment and investment.
The investor’s nervousness has contributed to increasing fluctuations in financial markets, and sending the revenue of the doctrine (government borrowing costs) to its highest levels at the fairy levels. Looking at the future, MPC decision may achieve an accurate balance between preventing any additional slowdown and avoiding inflation.