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UK Weekly: New year, same dilemma for the BoE

The data released this week showing a mix of weaker economic activity but rising price pressures will do little to ease the Bank of England's policy dilemma. We suspect that the continued bad news on the economy mean the Bank will become increasingly confident that weaker demand now will eventually weigh on inflation, thereby allowing it to cut interest rates all the way to 3.50% in early 2026.

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