The Bank of England predictably cut interest rates from 4.50% to 4.25% today and gave the impression that it will continue to cut rates at the current pace of 25 basis points (bps) every quarter. As a result, we no longer think the Bank will slow the pace of rate cuts and have added in one more 25bps rate cut to our forecast for this year, taking rates down to 3.75% rather than 4.00% previously. That said, the risks to our view that rates will fall to 3.50% next year lie to the downside.
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