Another rate cut likely

The MPC is likely to use the recent confirmation that GDP growth slowed in Q4 and the current low rate of headline inflation as justification for another interest rate cut at the conclusion of its policy meeting on Thursday 4th April. But with core inflation still high and a growing perception that the central bank is allowing its control of inflation to slip, further policy loosening raises the risk that inflation rebounds strongly and ultimately requires interest rates to be higher in future.