“Capital Economics deputy chief UK economist Ruth Gregory said falling inflation expectations, stalling retail sales and a declining jobs market would allow further rate cuts”.
“Capital Economics believes interest rates could fall to as low as 3 per cent while markets have priced in a drop to around 3.5 per cent by the end of next year”.
Ruth Gregory – Capital Economics deputy chief UK economist
Vote: Cut by 25 basis points
What has influenced your decision?
“Almost every major data release since the November policy meeting, including those on the labour market, CPI inflation, GDP, retail sales and the PMIs, suggest disinflationary pressures are building.
“Admittedly, we think food inflation has yet to pass the peak. But households’ inflation expectations have cooled. Much of the 2025 inflation hump is being driven by jumps in prices of items that are partly set by the government or linked to previous rates of inflation. These jumps are unlikely to be repeated in April 2026.
“The loosening in the labour market over the last year will continue to exert downward pressure on services inflation.”