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

fergie_

Inflation has come in higher than expected in America and they are now reducing their expectations of cuts this year.

fergie_

UK inflation reported as 3.4%. Any changes to tomorrow's predictions?

RelievedSheff

fergie_ said:

UK inflation reported as 3.4%. Any changes to tomorrow's predictions?

No. They won't be cutting the BOE base rate this time round. It will be held again.

Strummer22

RelievedSheff said:

fergie_ said:

UK inflation reported as 3.4%. Any changes to tomorrow's predictions?

No. They won't be cutting the BOE base rate this time round. It will be held again.

Agreed, the only points of note will be how the vote is split (will anyone still be holding out for further rises?) and the wording in the committee report.

The next two months will be pretty interesting though. Oil prices have been creeping up and even if they fell back significantly tomorrow the effect would be unlikely to filter through to prices at the pump for a month or two. Meanwhile there's a big baked-in drop in April (data reported in May) due to the drop in the energy price cap. 

I expect next month to have a moderate month on month increase, mainly due to fuel prices. If it's a 0.4% MOM increase, next month's headline rate will be 3%. If this is followed by a fall of 0.4% the following month (plausible due to fall in energy prices), by May the headline inflation rate will be 1.4%. Whether this alone would be sufficient to prompt an interest rate cut remains to be seen.  

fergie_

The other questions are whether the bank will continue to follow America's lead? And will Japan raising rates affect anything here?

Hoenir

fergie_ said:

The other questions are whether the bank will continue to follow America's lead? And will Japan raising rates affect anything here?

Why change what's working. Still a considerable amount of unwinding to go that's hidden beneath the surface.  As for consumer borrowing rates. Personal view is that they aren't going to fall significantly any time soon. Wouldn't be surprised if they continue to edge upwards. Until the BOE finally moves the base rate. Though this is still some months away. 

Further out. UK inflation is projected to rise again later this year. Stability is therefore key. No knee jerk reactions. 

ReadySteadyPop

fergie_ said:

The other questions are whether the bank will continue to follow America's lead? And will Japan raising rates affect anything here?

If Japan do more hikes the effect on borrowing costs will be felt.

Hoenir

ReadySteadyPop said:

fergie_ said:

The other questions are whether the bank will continue to follow America's lead? And will Japan raising rates affect anything here?

If Japan do more hikes the effect on borrowing costs will be felt.

Japan has it's own unique set of problems. That the other Central Banks are attempting to avoid with the implementation of QT now.  Japan is also experiencing a bumpy period of economic performance. 

ReadySteadyPop

Hoenir said:

ReadySteadyPop said:

fergie_ said:

The other questions are whether the bank will continue to follow America's lead? And will Japan raising rates affect anything here?

If Japan do more hikes the effect on borrowing costs will be felt.

Japan has it's own unique set of problems. That the other Central Banks are attempting to avoid with the implementation of QT now.  Japan is also experiencing a bumpy period of economic performance. 

So are you saying no more hikes, or more hikes from Japan?

ReadySteadyPop

There was discussion on SKY news today about the possibility of more rate hikes from the BOE I  did not catch the whole conversation though.