The Bank of England sprung no surprises, leaving interest rates at 5.25% for the fifth time in a row and, despite no MPC members no longer voting to raise interest rates, it retained its relatively hawkish guidance. But it is the data not the guidance that counts. And our forecast that inflation will fall further and faster than the Bank expects suggest it will change its tune in the coming months. That’s why we think a rate cut in June is possible and why we think rates will fall to 3.00% in 2025 rather than to 3.75-4.00% as priced into the market.
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