A Reuters poll conducted on February 10-16, revealed that economists are eyeing a 25 basis points rate cut by the Bank of England at the next meeting.
Majority of economists expect the Bank of England to trim rates in March as inflation trends toward target
The survey polled 63 economists; 41 project the BoE will reduce the Bank Rate to 3.50% on March 19.
Sanjay Raja, chief UK economist at Deutsche Bank said “We stick to our call for the next Bank Rate cut to come in March and a final rate cut to come in June, taking Bank Rate to 3.25%, broadly consistent with our estimate of neutral.”
Of the rest, 19 economists, expect the BoE’s first move in April, aligned with the BoE’s Monetary Policy Review of this month. One predicts a cut in June, one is undecided whether the UK central bank would move in April or June, and another one expects rates unchanged at 3.75%.
For the rest of the year, analysts were split on whether a second cut will come in the second quarter or later, this year. The median forecasts see the Bank Rate ending at 3.25% this year.
BoE CPI projection
In the February Monetary Policy Report, policymakers expect inflation to hit 2.1%. The Bank expects the CPI to fall closer to its 2% goal in April or May, due to one-off factors from regulated prices and the November budget.
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