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2025-09-18 19:40:23
[Confederation of British Industry (CBI): Expectations for a rate cut remain, markets await the next step] (1) Alpesh Palaya, Deputy Chief Economist at the Confederation of British Industry (CBI), stated that the Bank of England's decision to hold interest rates steady was expected, but the market's focus will be on the policy committee's actions in the coming months. (2) While there is broad consensus that interest rates should be lowered further, there are disagreements on the pace and magnitude of these cuts. (3) Expectations for a rate cut are primarily driven by signs of a weakening labor market and slowing wage growth. (4) The policy committee remains wary of persistent price pressures, concerned that an expected inflation "peak" in the autumn could impact wages and pricing, exacerbating rising household inflation expectations. (5) Ahead of its November meeting, the committee will closely monitor relevant data, while also keeping an eye on the stability of the bond market. (6) Recent market volatility may prompt the Bank of England to slow the pace of quantitative tightening.
