Bank of England sees economy ‘moving in right direction’ for interest rate cuts

Britain’s economy is “moving in the right direction” for the Bank of England to start cutting interest rates, Governor Andrew Bailey said as two of his colleagues dropped their vote for a rate hike.

But both Jonathan Haskel and Catherine Mann joined the majority in favor of no change. Swati Dhingra again cast the lone vote to cut Bank Rate to 5.0 per cent. The BoE decision follows the U.S. Federal Reserve’s announcement on Wednesday that it remained on track for three interest rate cuts this year which sparked a global rally in stock markets.

Britain’s headline inflation rate – which topped 11 per cent in October 2022 and led to a historic living standards squeeze – remained the highest in the Group of Seven in February at 3.4 per cent. Most analysts and investors have said they think the BoE will only cut rates for the first time in the third quarter, probably at its August meeting.

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