Signs of Persistent Inflation Leave BOE Cautious on Cutting Rates -- Market Talk

Dow Jones
2025/03/20

1342 GMT - Worrying signs of U.K. inflation persistence warrant a cautious stance from the Bank of England on cutting interest rates for now, Pepperstone strategist Michael Brown says in a note. The central bank voted 8-1 to leave rates at 4.5% with just one policymaker favoring a rate cut. The BOE repeated its "gradual and careful" approach to rate cuts. Inflation remains considerably above the 2% target and consumer prices are expected to reach 3.75% in the third quarter, Brown says. He expects the BOE to deliver one 25 basis-point rate cut per quarter. However, it could increase the pace of rate reductions if the labor market weakens significantly and lowers sticky services prices, he says. (renae.dyer@wsj.com)

 

(END) Dow Jones Newswires

March 20, 2025 09:42 ET (13:42 GMT)

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