JP Morgen AM: Rate cuts from the BoE may still be some way off

JP Morgen AM: Rate cuts from the BoE may still be some way off

5 februari 2024

Monetair beleid Verenigd Koninkrijk
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There were no surprises when the Bank of England (BoE) opted to keep rates on hold at last week's meeting. Recent data prints had shown both wage growth and services inflation undershooting the Bank's November projections meaningfully, albeit still at elevated levels. 

Like the Federal Reserve (the Fed), the BoE indicated that while rates had likely peaked, it is too early to be thinking about rate cuts. In our view this is justified, given the recent reacceleration in UK economic activity. The composite purchasing managers' index (PMI) rose 0.4 points to a preliminary 52.5 in January, while consumer confidence reached a two-year high. The Bank will likely want evidence that this pick-up in demand is not having an inflationary impact before cutting rates.

05022024 JP Morgan AM

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