England Bank is widely expected to reduce interest rates on Thursday. This is widely expected to reduce interest rates in the increase in taxes paid by the threat of drags paid in the Donald Trump market between companies and US President Donald Trump, taking into account domestic growth prospects. Masu.
As of Wednesday morning, the money marker was priced at a 98 % chance of reducing a quarter of a quarter. As a result, the bank fee is 4.5 %. BOE has chosen to hold a previous rally in December, with 5 % of the “rise” service inflation and a higher headline print higher than expected. The rate was then cooled to 2.5 %, and the service inflation dropped to a 33 -month low, 4.4 %.
Since January, traders have increased the number of BOE rates, which are likely to be held in 2025. Earlier this year, only economists including British Bank heads and prominent business voices were expected. Lloyd’sCharlie Nun says he is expecting three trims. Meanwhile, the market has set a price reduction by more than 80 Basis points by December, suggesting that it may be reduced by four.
These bets are built behind the surprise of several data, such as retail sales data, which is weaker than expected and the growth in November, which is disappointing.
Thorough monitoring on Thursday is to be divided among the nine members of the monetary policy committee -the unanimous or almost indifferent decision suggests a bias for alleviation, and BoE’s latest. Prediction of growth and inflation is suggested.
The British economy has stagnated in the third quarter, and BOE has already predicted that it did not grow for the last three months last year.
BoE’s growth prediction in 2025 or 2.7 % in the fourth quarter of 2025, which is 2.2 % in 2026, is considered to be a pigeon support.
Future uncertainty
The two major developments in the future may complicate bank predictions. This may be questionable for Governor Andrew Bailey.
The first is that the Central Bank is currently affecting potential inflation from the fiscal reform published by the British government in October. According to a survey by the British Chamber of Commerce issued in January, some companies are planning to increase prices as a result of higher costs.
The second problem is how the Britain will fare at the beginning of the Trump’s unstable trade policy and the beginning of a trade war between China. Trump threatens to pound the customs duties on imports from the UK and the European Union, but suggests that delays in duties in Canada and Mexico may be able to negotiate how to get out of the battle. 。
In addition, the United Kingdom can benefit from a wide range of trade disputes with the United States to enable British investment and new trade opportunities due to the better trade relationship with the world’s largest economy. It is suggested.
“If Chinese products find the path to the continent and the UK, and put downward pressure on the price, (European Central Bank) and BOE are more aggressive to reduce interest rates than this year’s market. Give the scope of the BRI Wealth Management, the highest investment manager, said to the CNBC “Street Sign.”
This is likely to reconfirm the differences in monetary policy between BoE and ECB. This has confirmed the market that is likely to be reduced by this year’s percentage points, and the US Federation preparation system, which has been trimmed with the maximum half points.
Anthony Karaminas, a global head of SEI sub-advertising bonds, stated that the UK’s “Stagflation-Lite” status (combining economic stagnation and target inflation) is an issue for Boe. It also complies with its explicit inflation dating. “
“Looking at the future, sticky inflation may limit the ability to further reduce the rate of Governor Bailey,” said Kalaminus, saying in email.
He said that the central bank moved forward at a quick pace, and the British government’s bond market said, “It may suffer from reliability penalties in the form of insurance premiums significantly,” he said, and the government spent. When it is restricted, it boosts the economy when “desperately needs productive growth”.
British borrowing costs rose rapidly in January in the sale of the world bond market, resulting in concerns about British deficit and weak growth forecast. Since then, borrowing costs have fallen significantly.
