It may suggest the reduction of the preparation interest rate of England and the future.

BoE is set to reduce interest rates from 4.75 % to 4.5 %.

The British economy has been stagnant recently and has been strengthening interest rates.

MPC members may oppose market prices

Finance Minister Reeves may want a wobble signal

January 30 (Reuters) -It is likely to be able to fine -tune the Ingrand Bank next week to be able to make a faster reduction than the current economic flat line.

The Economist voted by Reuters expects BOE to reduce the benchmark rate from 4.75 % on February 6 to 4.5 %. Investors are looking at the probability of cuts of about 90 % next week.

Since BoE published the last prediction in November, the economy has stagnated, and the stagnant inflation scale that was the most carefully viewed by the interest rate setter that was reduced last month has been stagnant, but the growth of wages accelerates unexpectedly. I did.

Data that provides mixed signals in the outlook makes investors sensitive to changes in the members of the monetary policy committee. In December, the six people voted to hold the rate, and the three supported the quarter point cut.

Rate setters can be piloted early on important questions about inflation outlook. How will the employer respond to the government’s October 30 budget, which has imposed a large -scale raising salary tax from April?

The financial market on Wednesday has been priced by almost three -quarters of the BoE rate reduction this year, but compared to two people in the early January, which was sharp in the bond yield of the British government but had a sharp increase in short -lived. 。

Change the expectation of the rate

President Donald Trump’s appointment and anxiety around British finances, so he was driven to change the expectations of the US rate, so the sale of the Minister of Rachel Reeves will take action to meet the financial rules as needed. I say

She probably wants Boe’s Dub’s turn. There is a risk of knocking off her on a knock -off course in order for the budget to meet the financial rules, which increases government borrowing costs.

Expectations for reducing the BoE rate set for each market may be too sloppy for the preference of MPCs, and some members are more likely to emphasize economic risk, and the Euro area is prospects. May worsen.

The European Central Bank has already reduced four rates four times since the mid -2024, and will definitely provide the fifth cut on Thursday.

“The flashy statement from BOE is expected to maintain a pound in the backfoot in the short term, but it will also provide comfort for investors and business communities,” Rabobank’s senior FX strategist, Jane. Foley says.

MPC members’ public comments have become thinner on the ground from the beginning of this year. Those who provide opinions tend to emphasize the possibility of a decline in interest rates.

In the first speech after participating in the MPC, the external member Alan Taylor expected that it was time to reduce the price on January 15, and that four such movements could be seen in 2025.

Deputy Governor Sara Breedon said on January 9 that economic data supported BoE’s gradual reduction messages, but it was difficult to make sure the timing was difficult.

The interest rate in the short -term market has declined in the past few weeks, but it has been rapidly maintained in two and three years, compared to the interest rate that supported BOE’s predictions.

In other words, MPC members may determine that the financial status that affects corporate and mortgage borrowing rates is too strict, and that in the next few years, we will push for more inflation.

Philip Shaw, Chief Economist of Investec, stated that it is difficult for companies to boost taxes to consumers, as their economic growth is weak.

“This will make it easier for England Bank to investigate the short -term increase in inflation and provide more interest rates than now,” said the show.

This week’s business survey showed that workers were likely to stand on the arrow through an increase in wages. (Report by Andy Bruce, editing by Alex Richardson)