Is a rate cut imminent? Watching incoming UK Inflation data Is a rate cut imminent? Watching incoming UK Inflation data
"The next move will be a cut," Bank of England's Andrew Bailey stated in response to a question about the Governors thoughts on interest rates during a speech at the London School of Economics. This does not mean the next decision will immediately be a cut; rather, rates will remain stable until a cut is implemented, effectively ruling out any rate hikes for now. This is an important distinction. The timing for cutting interest rates remains uncertain though. In the last decision, only two of the Committee's nine members voted for a rate cut.
Helping decide when the cut will come will be the revelation of the UK latest inflation data, due very soon. UK inflation could be approaching a huge milestone, with some predicting that a sharp drop in the April figures will bring the headline rate below the Bank of England’s 2% target. This would be a significant decrease from the current rate of 3.2% and could determine whether a June interest rate cut is warranted, according to economists.
On the GBP/USD chart, the previously dominant peak of April has been surpassed by pound bulls. The next challenge is to surpass late March’s surge to 1.2800. If achieved, the next resistance level could be the year-to-date high of 1.2893. However, recent consolidation may indicate a decline in bullish momentum.
For the exact date and time, import the BlackBull Markets Economic Calendar to your email inbox.
