The Bank of England (BoE) is scheduled to announce its pivotal interest rate decision along with an updated quarterly economic forecast later today at 12:00 UTC. The consensus among multiple financial institutions is that the central bank will reduce its rates by 25 basis points to 4.5%, continuing its strategy of quarterly rate cuts.
Analysts from Goldman Sachs have underscored the decision's likely underpinnings, citing the UK's recent economic sluggishness, worsening labor market conditions, and a modest uptick in core service inflation as key factors favoring another rate reduction. Meanwhile, Deutsche Bank predicts an 8-1 vote in favor of the cut, highlighting broad support within the central bank for ongoing rate adjustments.
According to IFR, a Reuters subsidiary, expectations are set for the BoE to reiterate its stance on the gradual easing of policy restrictions, maintaining a steady pace of rate reductions at least until August. However, there's a caveat: Ebury strategists warn that any unexpectedly aggressive rate cut signals could exert downward pressure on the British pound, potentially leading to a decrease in its value against other major currencies.