Bank of England Expected to Cut Interest Rates in 2024 as Inflation Slows

The Bank of England is anticipated to lower interest rates in 2024 as inflation eases, following recent economic data. The Bank, under the guidance of Governor Andrew Bailey, has been closely monitoring inflationary trends to make informed decisions.

Inflation in the UK has shown signs of moderation, albeit remaining above the government’s 2% target. The Office for Budget Responsibility (OBR) projects a decrease in average inflation to 2.2% this year, indicating a positive outlook for the economy.

The Monetary Policy Committee, comprising nine members including external experts, is responsible for setting the base rate or ‘Bank Rate.’ This crucial interest rate influences borrowing costs and loan repayments nationwide.

The Committee convenes every six weeks, with the next interest rate decision scheduled for 21 March. Market observers await the upcoming decision, considering the latest inflation and wage growth figures.

New data released by the Office for National Statistics (ONS) indicates a rise in wages, offering a glimpse into the UK’s economic landscape. Additionally, recent economic growth figures for January have shown a modest increase, reflecting ongoing stability.

While experts speculate on a potential interest rate cut around June, the Bank of England remains cautious, aiming to avoid hasty decisions that may require reversal in the future. The institution prioritizes sustainable economic management amidst evolving market conditions.