BoE rate cut priced in but Trump factor raises future volatility concerns

Future of rate cuts uncertain

Markets have largely priced in the expectation of a 25 bps cut to interest rates from the Bank of England today (6 February), but economists and investors are warning that Donald Trump’s unpredictability could threaten the future of the monetary policy roadmap.

Ahead of the Monetary Policy Committee's meeting, economists at ING economics forecast an 8-1 vote in favour of a quarter-point cut, "with arch-hawk Catherine Mann once again dissenting", the economists predicted.  Mann is yet to vote for a rate cut and has consistently made the case for further hikes, despite the remainder of the MPC becoming increasingly dovish. Andrew Bailey forecasts four BoE rate cuts in 2025 – reports This widely anticipated change would see the current Bank rate cut from 4.75% to 4.5%, with inflation sitting at 2.5%, slightly above the central bank's 2% targ...