The falls in employment triggered by the Chancellor’s rises in National Insurance Contributions for employers and the minimum wage have increased our confidence that it is only a matter of time before wage growth and CPI inflation slow to rates consistent with the 2.0% inflation target. As a result, we think the Bank of England will cut interest rates from 4.25% now to 3.00%, which would take rates below the low of 3.50% priced into the financial markets.
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