The Q3 GDP data will spark a big debate about whether or not the economy is in recession (the published growth rate was 0.0% q/q, but GDP declined by 0.03% or £173m). But the key point is that the economy is not weak enough to reduce core inflation and wage growth quickly. As such, we don’t expect the Bank of England will be able to cut interest rates until late in 2024 rather than in mid-2024 as widely expected.
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