1319 GMT - Stubbornly high inflation could encourage the Bank of England stick to gradual interest-rate cuts, Pepperstone strategist Michael Brown says in a note. The BOE voted 7-2 to cut rates by 25 basis points to 4.5% Thursday with two policymakers preferring a 50 basis-point reduction. This decision is unlikely to prove a "game changer" for the policy outlook, Brown says. The BOE will probably cut rates by 25 basis points per quarter, with a total of 100 basis points this year. More aggressive rate cuts are possible, particularly if increased labor market slack acts as a significant drag on demand and lowers stubborn services inflation. "For now, though, the Monetary Policy Committee seem likely to err on the side of caution," he says. (renae.dyer@wsj.com)
(END) Dow Jones Newswires
February 06, 2025 08:19 ET (13:19 GMT)
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