Bank of England set to lower interest rates as Budget dampens bets for 2025
The Bank of England is expected to lower interest rates this week, while markets are betting on fewer cuts next year after forecasts suggested the new government’s first Budget will push up inflation.
Analysts predict members of the Monetary Policy Committee (MPC) will vote to cut the central bank’s base rate by a quarter-point to 4.75 per cent at their next meeting on Thursday.
Official figures last month boosted hopes of a cut as inflation fell to 1.7 per cent, its lowest level since April 2021, and stickier services inflation also dropped.
Meanwhile, data showed wage growth eased again to its lowest level in two years. Average pay growth, excluding bonuses, fell to 4.9 per cent in the three months to August, down from 5.1 per cent in the previous quarter.
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