Economists have suggested that a cut in the Bank’s base rate was now expected after Andrew Bailey used an interview to say a rate cut is now “in play” after the BoE’s monetary policy committee voted this week to hold interest rates for another month.
While he refused to say when and by how much interest rates could be cut, the fact the head of the BoE is talking about it as a possibility has been seized upon by economists. Deutsche Bank is now viewing it as a significant shift in stance, stating: “We see a May rate cut as 50/50. In our view, the MPC has indeed opened the door for rate cut in May. The debate around rate cuts, we think, is firming.”: “I’m taking it as a sign that the Bank is getting closer to rate cuts.
But there were doubts that the more optimistic noises coming from the BoE would result in a cut to rates as soon as May, with June still being seen as the most viable outcome.
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