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2025-12-17 20:31:04
[Inflation Data Clears the Way for Rate Cuts, Pound Faces Further Weakening Pressure] ⑴ Analysts point out that the pound faces the risk of further decline as the Bank of England's rate-cutting cycle is expected to be longer than that of most other G10 central banks. ⑵ Lower-than-expected UK inflation data released on Wednesday should dispel any market doubts about a rate cut by the Bank of England on Thursday (December 18). ⑶ Analysts predict that inflation data may decline further by February next year, at which point the Bank of England may cut rates again. ⑷ The market has not yet fully priced in the expectation of another rate cut in the first half of next year, which means that short-term government bond yields still have room to fall. ⑸ The potential decline in UK short-term interest rates will put greater downward pressure on the pound exchange rate.
