Bank Of England Expected To Cut Interest Rates Amid Economic Challenges

According to Odaily, the Bank of England is set to announce its interest rate decision tonight, with most experts predicting a 25 basis point cut to 4.5%. This move would continue a series of rate reductions that began last summer. Chris Arcari, an analyst at financial firm Hymans Robertson, noted that the Bank of England will need to "walk a tightrope" when considering further rate cuts later this year. While the current economic conditions allow for "moderate rate cuts," the bank may adopt a cautious approach moving forward. The rise in cost inflation is partly attributed to policies announced in last October's budget. UK Chancellor Reeves increased corporate national insurance contributions, aiming to allocate more government funds to public services. However, some companies have complained that this has raised costs and exacerbated inflation. Matthew Ryan, an analyst at financial company Ebury, added that with economic growth stagnating and inflation rising, the Bank of England will need to assess which risk might dominate this year.