Bank of England interest rate cuts now less likely
City traders are scrambling to readjust their expectations for UK interest rate cuts, following this morning’s acceleration in UK wage growth.
The money markets now indicate there’s just a 7% chance that the Bank of England cuts interest rates on Thursday, down from around 15% yesterday.
The markets no longer expect three cuts next year either. Bank rate, which is currently 4.75%, is now seen falling to around 4.1% in December 2025, meaning only two quarter-point rate cuts are fully priced in.
Yesterday it was expected to fall nearer to 4%, which had implied three quarter-point rate cuts next year.
UK RATE FUTURES POINT TO ABOUT 61 BASIS POINTS OF BANK OF ENGLAND RATE CUTS BY END OF 2025…
