Expect 0.5% rate cut by next Spring, New Star says

clock

An expected rate cut by the Bank of England - given fresh impetus by yesterday's quarterly inflation report - could be as high as 0.5% by late Spring, New Star's Simon Ward says.

Ward says the two-year-ahead inflation forecast assuming unchanged 5.75% rates is far below target at an estimated 1.75%, pointing out this is the largest negative deviation in the history of the Monetary Policy Committee. He adds the GDP forecast based on unchanged rates shows annual growth slowing sharply from 3.3% currently to below 2% by the third quarter of 2008. However, Ward questions why the Bank didn’t use this economic data as justification for a rate cut last week. “Risks to the forecast are judged to be balanced for inflation and on the downside for growth, versus on the upsi...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Your profession

March 2024: Month in review with deputy editor Jenna Brown

March 2024: Month in review with deputy editor Jenna Brown

Take a look at some of the news and feature highlights of the last month

Jenna Brown
clock 28 March 2024 • 5 min read
Wren Sterling adds £265m in client assets in latest deal

Wren Sterling adds £265m in client assets in latest deal

First advisory firm purchase of 2024 for national financial planner

Jenna Brown
clock 28 March 2024 • 1 min read
Consumer Duty Alliance looks to attract advice industry talent

Consumer Duty Alliance looks to attract advice industry talent

New Talent Alliance will be chaired by M&G Wealth Advice MD Tom Hegarty

Isabel Baxter
clock 27 March 2024 • 2 min read