Bank of England Economist Warns that Interest Rate Cuts are Far From Ideal
The Bank of England has, on numerous occasions, indicated it needs to see sustainable easing of inflation before it could move to cut interest rates.
Traders have scaled back their expectations of interest rate cuts by the Bank of England (BoE) this year after a top economist said imminent cuts were unlikely.
Instead of anticipated six interest rate cuts, traders are now betting on just two to be announced by the BoE’s Monetary Policy Committee (MPC) in 2024. The rates are expected to begin to fall in either August or September.
MPC member Megan Greene has warned that while the risk of inflation persistence is diminished in the UK, it remains higher than in other advanced economies.
“The markets are moving rate cut bets in the wrong direction,” Ms. Greene said, adding that cuts should be “a way off.”
United States and UK
The comparison of economic conditions in the United States and Britain, including potential productivity growth and labor supply, shows a stark difference, the top economist said.here.
Source link
