BOE governor Bailey expects 4 price cuts subsequent yr if financial outlook stays the course

• Inflation had fallen extra quickly than what was anticipated a yr in the past
• There are a variety of potential paths forward
• However the base case situation implied is that BOE would follow extra “gradual” price cuts
• This central view means BOE must “lean in a bit more durable” to maintain disinflation course of on monitor
• Full transcript (could also be gated)

That’s greater than what markets are pricing in for subsequent yr however it’s maybe trying too far forward. As issues stand, markets are assured about two price cuts by the BOE by the point we get to the Might assembly. For 2025 as an entire, there is a complete of ~80 bps of price cuts priced in now. On the finish of the day, we’ll must see the place the info takes us. And that would be the information for markets wherein merchants will likely be performing upon.

This text was written by Justin Low at www.ubaidahsan.com.



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