The Bank of England (BoE) announced a 25 basis point cut in its policy rate, bringing it down to 4.75% as anticipated by market analysts. This decision, made at the November policy meeting, saw eight policymakers voting for the rate cut, with Catherine Mann as the sole dissenter, opting to keep the rate at 5%.
The BoE’s updated forecast projects a CPI of 2.7% in one year (up from August's 2.4%) and expects inflation to gradually decline to 1.8% by 2027. Additionally, the BoE adjusted its GDP growth forecast, expecting a 0.2% quarterly increase in Q3 and a 0.3% rise in Q4 of 2024, with unemployment projected at 4.2% by year-end.
Following the rate cut, GBP/USD gained slightly, edging up by 0.4% to 1.2928. The market remains attentive to the BoE’s approach to gradual easing, as policymakers emphasize that sustained restrictive rates are crucial to stabilizing inflation around the 2% target.
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