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2025-12-12 20:27:44
[Bank of England May Cut Rates at Next Thursday's Meeting] Danske Bank analysis indicates that the Bank of England may cut interest rates at its meeting next Thursday. If it decides to lower the benchmark rate by 25 basis points to 3.75%, the pound may face mild downward pressure. The institution predicts that the rate cut decision may be passed by a narrow 5-4 majority. Reasons supporting a rate cut include: continued slowing inflation in October, a faster rise in the autumn unemployment rate, and an unexpected economic contraction in October. Furthermore, the slightly tighter fiscal budget in November further reinforces the necessity of loose monetary policy. Analysts believe these factors may prompt Bank of England Governor Bailey to change his stance and join the camp supporting a rate cut. Although the latest inflation and employment data will be released before next week's rate decision, Danske Bank expects that this data is unlikely to be sufficient to reverse the rate cut decision. If the Bank of England begins its rate-cutting cycle earlier than the market expects, it may trigger short-term pressure on the pound.
