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The Bank of England kept Interest rates steady at 5% during its latest meeting, while also announcing plans to reduce its stock of British government bonds by another 100 billion pounds over the next year. The decision had a mixed impact on the financial markets, with sterling rising and bond yields increasing.

Various experts shared their insights on the decision. Chris Arcari from Hymans Robertson in Glasgow expects the BoE to continue cutting rates gradually, with the market already pricing in further cuts. Laura Cooper from Nuveen in London highlighted the BoE’s cautious approach compared to its U.S. counterparts. Jamie Niven from Candriam in London predicts another rate cut in November, emphasizing the importance of the terminal rate in the cutting cycle.

Susannah Streeter from Hargreaves Lansdown in Bristol expressed optimism that the era of high Interest rates may be coming to an end, providing relief to companies and consumers. Henry Cook from MUFG in London noted the continued high nominal pay growth and elevated Inflation, making back-to-back rate cuts a challenging consensus.

Looking ahead, Dean Turner from UBS Global Wealth Management in London expects the next rate cut in November, with a potential quarterly pace of cuts next year. Lindsay James from Quilter Investors in London emphasized the need for action from the BoE given the economic challenges. Frances Haque from Santander in London highlighted positive news on wage growth, suggesting a slow and steady pace for future rate cuts.

Overall, experts anticipate a gradual easing cycle by the BoE as inflationary pressures ease and the UK economy transitions towards lower Interest rates.

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