The run of softer-than-expected news on CPI inflation and wage growth means we now expect the Bank of England to cut interest rates sooner than before. Our forecast is that rates will be cut from 5.25% in June and will fall to 3.00% in 2025. The markets broadly agree and, as a result, some mortgage rates have fallen back below 4%. This essentially means the effects of lower interest rates are already being felt. As such, the risks to our 0.0% forecast for GDP growth in 2024 lie on the upside.
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