Are we expecting the BOE Base Rate to drop to 4% on 7th August?

Hoenir

Strummer22 said:

Base rate cut by 0.25% to 4.5%. Interesting to note that two of the nine committee members voted for a 0.5% cut (the rest for 0.25%). This strongly indicates another cut either in March or May, barring unexpected economic data.

The BoE predicts headline CPI inflation to rise to 3.7% in 2025 Q3 before falling again, but apparently thinks this is transient, won't increase underlying domestic inflationary pressures, and shouldn't hinder the plan to cut rates. Who knows how that'll all pan out?

There's the unknown Trump effect. Imported inflation / how the exchange rate behaves is outside the BOE's direct sphere of influece. The old saying " When the USA sneezes the rest of the world catches a cold".  What they'd like to do and can do may differ. 

Pulpdiction

The base rate needs to come down as in itself it is now inflationary.  4% by the end of the year sounds about right.  I can't see it going much below 3.5% over the next few years.

RelievedSheff

I don't think they will drop the rate again next month, but I do predict a further 0.25% drop at the meeting after next on 8 May.

Strummer22

Pulpdiction said:

The base rate needs to come down as in itself it is now inflationary.  4% by the end of the year sounds about right.  I can't see it going much below 3.5% over the next few years.

Not sure this makes sense. Lower base rates are inflationary, not higher. 

Strummer22

RelievedSheff said:

I don't think they will drop the rate again next month, but I do predict a further 0.25% drop at the meeting after next on 8 May.

Might be another 0.25% next month if wage, employment and inflation data are not more 'inflationary' than expected.

Hoenir

Strummer22 said:

RelievedSheff said:

I don't think they will drop the rate again next month, but I do predict a further 0.25% drop at the meeting after next on 8 May.

Might be another 0.25% next month if wage, employment and inflation data are not more 'inflationary' than expected.

Takes 18 months for interest rate changes to feed through to the real economy. 

Altior

Reasonably correlated

lojo1000

There is no money even when unemployment is near record lows. Deficits and debt continue to increase and GDP growth is zero.

Can you see the future? Do you understand why this is happening? 

Altior

BoE drops rates and reported inflation spikes !

Some perilous times ahead for them (and for us!)

Hoenir

Altior said:

BoE drops rates and reported inflation spikes !

Some perilous times ahead for them (and for us!)

Inflation is forecast to reach 3.7% by the BOE during the course of 2025.  This unexpected figure probably kills off any chance a further reduction in Base Rate anytime soon.