The Bank of England stressed that today’s decision to leave interest rates at 4.00% is a pause in the downward trend in interest rates rather than the end. With a tightening in fiscal policy in the Budget on 26th November on the cards, the Bank will probably resume cutting rates in the coming months. We still think rates will be cut to 3.00% next year rather than to the 3.50% priced into the financial markets.
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