Bank of England may cut rates despite risk of inflation rise

manchestereveningnews.co.uk:

The Bank of England is widely expected to reduce interest rates in the wake of reports predicting that the Labour Party’s recent Budget could fuel higher inflation over the next year.

A statement will be made public this Thursday following their November meeting, and market experts are largely forecasting a quarter-point decrease in the base rate from 5% to 4.75%.

Last month brought a sense of optimism as the headline rate of inflation fell to a modest 1.7%—the lowest since April 2021—and services sector inflation also dropped, bolstering the belief that policymakers will choose to lower the rate.

The aim is to manage borrowing costs and directly impact mortgage rates. Meanwhile, wage growth appears to have slowed, reaching its least aggressive pace in two years, with data revealing a deceleration to 4.9% over the three months leading up to July.