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Bank of England readies rate cut and could hint at more to come

The Bank of England is poised to maintain its current interest rate at 5.25% in its upcoming meeting, reflecting a cautious approach amidst signs of economic slowdown and persistent inflation. Despite expectations of a rate cut, the Monetary Policy Committee (MPC) is likely to keep rates steady, influenced by recent data showing a slight decrease in inflation to 4% in December, though still above the target of 2%. The MPC's decision is also shaped by the need to assess further economic indicators, including wage growth and service sector inflation, which remain high. Analysts suggest that while an immediate rate cut is unlikely, the Bank might signal potential future reductions, possibly starting in May or June, as part of a strategy to manage inflation back to the 2% target without triggering a recession. This cautious stance comes as the UK economy shows signs of stagnation, with GDP growth forecasts being revised downwards.

Read the Full Reuters Article at:
[ https://www.reuters.com/markets/rates-bonds/bank-england-readies-rate-cut-could-hint-more-come-2025-01-30/ ]