Rebound in activity won’t prevent further policy easing

The rebound in some activity data over the past month has led some to question whether the MPC jumped the gun with its bold package of measures in August. However, the loosening was no doubt one of the factors contributing towards the improvement in economic conditions. In any case, the MPC has left the door open to a further rate cut later this year even if the economy avoids recession. That said, it will want to see somemore data before it decides to move again, and so we expect any further rate cut to be delayed until November alongside the Inflation Report.