The Bank of England remains on hold as expected, and is expected to cut interest rates from November
On September 19th, after the inflation data remained unchanged in August, the Bank of England kept its benchmark interest rate unchanged on Thursday, and the market's expectations for another rate cut by the end of the year are growing stronger. The Bank of England cut interest rates for the first time last month, lowering the rate level by 25 basis points. So far this year, the UK's inflation rate has been gradually slowing down, from 4% in January to 2.2% in August, slightly higher than the low of 2% in May and June. However, the impact of rising airfares offset the decline in fuel and food prices, leaving last month's inflation rate unchanged from July. The UK's service sector inflation rate has remained high, which is one of the key concerns of the Bank of England's Monetary Policy Committee. James Smith, an economist at ING in the UK, said that the sustained decline in expected and actual wage and price growth in recent months suggests that further rate cuts are likely in the future. Combined with the continued cooling of the job market, we believe the broad consensus at the Bank of England will shift towards supporting faster rate cuts throughout the winter. We expect a series of rate cuts starting in November, with the bank rate lowered to 3.25% by next summer.
