Image

BOE's Taylor says don't suppose larger price cuts are essentially wanted or fascinating

  • Soft landing is at risk, UK economy is slowing down
  • Starting to see cracks in the labour market
  • Worried that inflation could undershoot target
  • Everything has to be taken into consideration, we are not on a pre-set path on rates
  • Confident that energy shocks are going to fall off in 2026
  • Sees greater probability of a downside scenario in 2026 on demand weakness and trade disruptions

Well, the next decision is going to be a tricky one with communication like this. As things stand, markets are pricing in ~76% odds of a rate cut in the next policy meeting in August. For what’s left of the year, there is ~53 bps of rate cuts priced in i.e. two more rate cuts.

This article was written by Justin Low at www.forexlive.com.

SHARE THIS POST