UK interest rate cut is ‘possible’ this summer, says Bank of England deputy

Ben Broadbent will only get one more chance to vote for an interest rate cut, at the June meeting of the Bank of England’s monetary policy committee.Ben Broadbent will only get one more chance to vote for an interest rate cut, at the June meeting of the Bank of England’s monetary policy committee.

Broadbent said the main drivers of inflation over the past two years – the Covid-19 pandemic and the Ukraine war – had faded and the Bank was watching to check whether the longer-term domestic effects on prices would also decline before making a first cut in interest rates.He said the monetary policy committee’s nine members must assess how those “second-round effects” in domestic prices and wages change the course of inflation over the next two years.

“This underpins our forecast that the Bank will cut interest rates from 5.25% now to 3% next year, rather than to 3.75% as investors expect,” the consultancy said.

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