The Bank of England will not shift its key interest rate from 3.75% on Thursday according to all 70 economists in a July 21-24 Reuters poll, and likely not for another year as inflation is expected to remain firmly above the central bank’s 2.0% target.
Inflation Outlook
British inflation dipped to 2.6% in June, official data showed on Wednesday, as a brief de-escalation in the Iran war reduced fuel prices. However, the slowdown is unlikely to last as the conflict has reignited, giving scant relief to new Prime Minister Andy Burnham.
Burnham wants to cut living costs but has yet to give full details on how that will be funded. Any decisions on tax will be announced in the budget, expected in the autumn.
A firm majority of respondents — 58 of 70 — saw Bank Rate at 3.75% through 2026 while eight saw a 25-basis-point lift and four saw a reduction to 3.50%.
According to median estimates in the Reuters poll, the first 25-basis-point drop will not come until at least July next year and will be followed by another in the fourth quarter.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
