The Monetary Policy Committee (MPC) has slowed the pace of monetary loosening and stressed that a large policy stimulus is in train. But the economic outlook has deteriorated further. And the MPC may just have been waiting for the analysis in February’s Inflation Report before cutting rates to an even lower level. We expect another 50 basis points (bps) cut at this meeting, with rates set to end up close to zero. With a framework for quantitative easing in place, unconventional monetary policy will soon follow.
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