2024-04-24 10:13:33
Traders have revised their forecasts following the publication of fresh UK inflation data and are now expecting just one cut in the Bank of England’s benchmark interest rate this year.
As Day.Az reports with reference to Interfax, Bloomberg reports this.
It is expected that by November it will be reduced by 25 basis points from the current 5.25% per annum. The probability of a second rate cut is now estimated at only 30%. Only a few weeks ago, experts expected the Central Bank to reduce borrowing costs three times in 2024.
The British Statistics Authority reported on April 17 that consumer prices in the country rose by 3.2% year on year in March after rising by 3.4% in the previous month. Thus, the pace of growth has slowed to its lowest level since September 2021.
However, independent analysts and economists at the Bank of England expected an even more significant weakening of inflation – to 3.1%.
“UK inflation continues to move in the right direction, but at a slower pace than expected,” said JPMorgan Private Bank global markets analyst Matthew Landon.
“The Bank of England rate cut bus is delayed,” said Hank Calenti, senior fixed income analyst at SMBC Nikko Capital Markets. “The head of the Central Bank warned that overall inflation would soon reach 2%, but it is service inflation that is driving the bus.” , and she’s still too high.”
RBC BlueBay Asset Management chief investment officer Mark Dowding believes there should be “no rate cuts at all” given the country’s inflationary pressures. “But in practice, one cut may occur as a political concession to the government,” but the Bank of England is unlikely to repeat this step, he believes.
Inflation data contributed to the appreciation of the British national currency, which was at its lowest in five months. It is trading at $1.2454, down from $1.2425 at the previous close.
At a meeting in March, the British Central Bank left the key rate at a 16-year high of 5.25% and made it clear that it would certainly reduce it this year, but did not specify the timing.
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