Interest rate preview: what we can expect
What next for interest rates?
Susannah Streeter, head of money and markets, Hargreaves Lansdown: “As financial markets are hit with waves of trepidation about what’s in store for global trade, the Bank of England is set to stay in wait-and-see mode. It’s highly unlikely, given the current climate of uncertainty, that policymakers will vote to cut rates this month.
The last inflation snapshot came in higher than expected, jumping to 3% in January, which is another reason why they won’t be in a hurry to reduce borrowing costs.
It’s unclear what the exact repercussions of Trump’s punishing tariffs will be for the UK, but given how intertwined the UK is with the global economy, it will also feel the effects as the trade war escalates. Already growth is highly sluggish, only just crawling along, by 0.1% in the final quarter of last year.
There are hopes of a trade deal between the US and the UK, but given Trump’s capricious policymaking, until any agreement is signed, sealed and delivered, the UK is set to stay vulnerable. So, given the precarious growth situation, two more rate cuts are on the cards for this year, but it’s likely that we will have to wait until May, at the earliest before another cut is delivered.’’