Bank of England dodges politics and on course for a first mid-summer rate cut

Ben Laidler, Global Markets Strategist at eToro, says: “The Bank of England held interest rates at a 16-year high of 5.25% as expected, but the door is now open to an August first rate cut with Governor Bailey ‘optimistic’ inflation was moving in the right direction.

Despite headline inflation now at the 2% target level, the monetary policy committee (MPC) remained split 7-2 in favour of holding rates unchanged for a little longer rather than a first cut at today’s meeting.

“The Bank is waiting to see further improvement in underlying inflation pressures, forecasting a 2.5% rate for the second half of the year, and unwilling to wade into the current politicised waters so close to the July 4^th general election.”