Central Banks
BOE Rate Cut Expected to Be Pushed Back by Election and Inflation
- Investors bet rates will remain at 16-year high until November
- Governor Andrew Bailey staying silent during election campaign
This article is for subscribers only.
This may be one meeting where the Bank of England is thankful the decision has been made for them. Prime Minister Rishi Sunak’s move three weeks ago to call an election has all but ruled out a rate cut when policymakers announce their decision at 12 p.m.
Inflation data on Wednesday only bolstered the case to wait a few more weeks to see which way price pressures are headed. While UK inflation slowed to the BOE’s 2% target for the first time in almost three years in May, price growth in the services sector remained almost triple that level. Investors and analysts expect Governor Andrew Bailey and his colleagues to leave the benchmark rate unchanged at a 16-year high of 5.25%.