Are we expecting BOE to remain at 4.75% on 8th February 2025?

IAMIAM

Agree. It will remain at 5.25 and I predict decrease to 4.5/4.25 as we head into the General Election. 

Hoenir

The economy is remaining more resilant than forecast. No need for the BOE to cut yet. Meanwhile savers who far outnumber borrwers continue to benefit. 

Strummer22

Based on today's inflation figure coming in higher than predicted, the first cut won't be until May at the earliest. 

If the MoM increase of 0.4% is repeated next month, the headline inflation rate will be 5% (because a -0.6% figure from Jan 2023 will drop out). 

It is worth noting that last month the consensus was 0.3% above actual, and this month was 0.2% below actual. Just one month's data isn't enough to break a long term trend (which is currently one of decreasing inflation).

sevenhills

Strummer22 said:

Based on today's inflation figure coming in higher than predicted, the first cut won't be until May at the earliest. 

One month's inflation figure is not that important.

RPI inflation = Dec 2023 - 5.2% down from the previous month's figure of 5.3%

Strummer22

sevenhills said:

Strummer22 said:

Based on today's inflation figure coming in higher than predicted, the first cut won't be until May at the earliest. 

One month's inflation figure is not that important.

RPI inflation = Dec 2023 - 5.3% down from the previous month's figure of 5.2%

Agreed, but the BoE have consistently reiterated the 'higher for longer' rhetoric and a rise this month coupled with a (nearly) guaranteed rise next month would give them justification for this - at least, in their eyes.

The fact is, inflation will probably still fall below 2% by April or May. The lag from rate changes is so long that just the expectation that this will happen should result in rate reductions soon, in order for those rate reductions to actually have some effect this year. The BoE is scared of getting it wrong again and will end up unnecessarily stifling economic growth. Yes, we may still avoid recession and the economy has been fairly resilient. But growth bobbing around 0% isn't great, is it?

MattMattMattUK

Strummer22 said:

sevenhills said:

Strummer22 said:

Based on today's inflation figure coming in higher than predicted, the first cut won't be until May at the earliest. 

One month's inflation figure is not that important.

RPI inflation = Dec 2023 - 5.3% down from the previous month's figure of 5.2%

Agreed, but the BoE have consistently reiterated the 'higher for longer' rhetoric and a rise this month coupled with a (nearly) guaranteed rise next month would give them justification for this - at least, in their eyes.

The fact is, inflation will probably still fall below 2% by April or May. The lag from rate changes is so long that just the expectation that this will happen should result in rate reductions soon, in order for those rate reductions to actually have some effect this year. The BoE is scared of getting it wrong again and will end up unnecessarily stifling economic growth. Yes, we may still avoid recession and the economy has been fairly resilient. But growth bobbing around 0% isn't great, is it?

It is far from great, but considering the impact of the pandemic, Brexit and the general economic mismanagement of the last 25 years we are probably lucky it not consistently negative. 

littleteapot

MattMattMattUK said:

Strummer22 said:

sevenhills said:

Strummer22 said:

Based on today's inflation figure coming in higher than predicted, the first cut won't be until May at the earliest. 

One month's inflation figure is not that important.

RPI inflation = Dec 2023 - 5.3% down from the previous month's figure of 5.2%

Agreed, but the BoE have consistently reiterated the 'higher for longer' rhetoric and a rise this month coupled with a (nearly) guaranteed rise next month would give them justification for this - at least, in their eyes.

The fact is, inflation will probably still fall below 2% by April or May. The lag from rate changes is so long that just the expectation that this will happen should result in rate reductions soon, in order for those rate reductions to actually have some effect this year. The BoE is scared of getting it wrong again and will end up unnecessarily stifling economic growth. Yes, we may still avoid recession and the economy has been fairly resilient. But growth bobbing around 0% isn't great, is it?

It is far from great, but considering the impact of the pandemic, Brexit and the general economic mismanagement of the last 25 years we are probably lucky it not consistently negative. 

I'm also suprised that growth isn't consistently negative. I don't know whether the figures are being massaged in some way.

I thought the mismanagement of the economy started with Maggie Thatcher, decimating the mining and manufacturing industries. That puts it nearer 45 years than 25...

MikeJXE

littleteapot said:

MattMattMattUK said:

Strummer22 said:

sevenhills said:

Strummer22 said:

Based on today's inflation figure coming in higher than predicted, the first cut won't be until May at the earliest. 

One month's inflation figure is not that important.

RPI inflation = Dec 2023 - 5.3% down from the previous month's figure of 5.2%

Agreed, but the BoE have consistently reiterated the 'higher for longer' rhetoric and a rise this month coupled with a (nearly) guaranteed rise next month would give them justification for this - at least, in their eyes.

The fact is, inflation will probably still fall below 2% by April or May. The lag from rate changes is so long that just the expectation that this will happen should result in rate reductions soon, in order for those rate reductions to actually have some effect this year. The BoE is scared of getting it wrong again and will end up unnecessarily stifling economic growth. Yes, we may still avoid recession and the economy has been fairly resilient. But growth bobbing around 0% isn't great, is it?

It is far from great, but considering the impact of the pandemic, Brexit and the general economic mismanagement of the last 25 years we are probably lucky it not consistently negative. 

I'm also suprised that growth isn't consistently negative. I don't know whether the figures are being massaged in some way.

I thought the mismanagement of the economy started with Maggie Thatcher, decimating the mining and manufacturing industries. That puts it nearer 45 years than 25...

You can bet your life on it 

Hoenir

littleteapot said:

MattMattMattUK said:

Strummer22 said:

sevenhills said:

Strummer22 said:

Based on today's inflation figure coming in higher than predicted, the first cut won't be until May at the earliest. 

One month's inflation figure is not that important.

RPI inflation = Dec 2023 - 5.3% down from the previous month's figure of 5.2%

Agreed, but the BoE have consistently reiterated the 'higher for longer' rhetoric and a rise this month coupled with a (nearly) guaranteed rise next month would give them justification for this - at least, in their eyes.

The fact is, inflation will probably still fall below 2% by April or May. The lag from rate changes is so long that just the expectation that this will happen should result in rate reductions soon, in order for those rate reductions to actually have some effect this year. The BoE is scared of getting it wrong again and will end up unnecessarily stifling economic growth. Yes, we may still avoid recession and the economy has been fairly resilient. But growth bobbing around 0% isn't great, is it?

It is far from great, but considering the impact of the pandemic, Brexit and the general economic mismanagement of the last 25 years we are probably lucky it not consistently negative. 

I thought the mismanagement of the economy started with Maggie Thatcher, decimating the mining and manufacturing industries. That puts it nearer 45 years than 25...

Same across much of the Western world. Once China opened it's doors to investment in the early 90's.  Time to take those blinkers off. 

sevenhills

littleteapot said:

I'm also suprised that growth isn't consistently negative. I don't know whether the figures are being massaged in some way.

We should ask what brings growth, I would say a larger population, technology and improved health/education.

In the past 3 years, the health of the nation has been in reverse!