BitcoinWorld Economists See Bank of England Holding Rates Through Year-End, Reuters Poll Shows The Bank of England is expected to keep its key interest rate unchanged at 4.75% through the end
BitcoinWorld
Economists See Bank of England Holding Rates Through Year-End, Reuters Poll Shows
The Bank of England is expected to keep its key interest rate unchanged at 4.75% through the end of 2024, according to a recent Reuters poll of economists, signaling a cautious approach amid mixed economic signals.
As of early December 2024, a majority of economists surveyed by Reuters predict that the Bank of England’s Monetary Policy Committee (MPC) will hold rates steady at its December meeting and maintain that level until at least March 2025. The poll reflects a consensus that inflation, while cooling, remains above the Bank’s 2% target, and that the labor market shows resilience despite sluggish growth.
The decision to hold rates comes after a period of gradual easing earlier in the year, when the Bank cut rates from a peak of 5.25%. However, recent data on services inflation and wage growth have given policymakers reason to pause, as they seek to ensure that price pressures are fully contained.
For homeowners and businesses, a prolonged hold means borrowing costs will remain elevated for longer. Mortgage rates, which have already fallen from their 2023 highs, are unlikely to drop significantly in the near term. This could weigh on consumer spending and housing market activity, but it also signals that the Bank is prioritizing price stability over short-term growth support.
Economists are closely monitoring the Bank’s quarterly projections, due in February, for clues about the path of rates in 2025. A key factor will be the trajectory of services inflation, which has proven stickier than goods inflation. Additionally, the impact of the autumn Budget on fiscal policy and its potential to fuel demand will be a critical consideration for the MPC.
While the majority of economists expect rates to remain on hold through year-end, there is notable uncertainty. A minority of forecasters anticipate a rate cut as early as February, depending on incoming data. For now, the Bank of England appears to be in a wait-and-see mode, balancing the need to tame inflation with the risk of stifling an already fragile economy.
Q1: What is the current Bank of England base rate?The current base rate is 4.75%, as set by the Monetary Policy Committee at its last meeting in November 2024.
Q2: Why is the Bank of England holding rates steady?The Bank is holding rates to ensure inflation continues to fall toward its 2% target, while also monitoring economic growth and wage pressures.
Q3: When could the Bank of England cut rates again?According to the Reuters poll, most economists expect the next cut to occur in the second quarter of 2025, though some see a possibility of an earlier move in February if economic data weakens significantly.
This post Economists See Bank of England Holding Rates Through Year-End, Reuters Poll Shows first appeared on BitcoinWorld.
