Comparison with Other Central Banks
The BoE’s stance follows the European Central Bank’s recent rate cut, while the U.S. Federal Reserve is not expected to reduce rates until later this year. Market expectations for a BoE rate cut are now set for September or November, despite a Reuters poll indicating a potential cut on August 1.
Political Implications
The timing of any rate cut is critical for Prime Minister Rishi Sunak, whose Conservative Party trails the opposition Labour Party by 20 points in pre-election polls. Sunak has highlighted the decline in inflation since taking office, whereas Labour attributes high mortgage rates to economic mismanagement by former Prime Minister Liz Truss.
Inflation and Wage Growth
The…
Read More