Bank of England Expected to Follow Fed in Slowing Rate Cuts, But Could Cut Further in the Future

BlockBeats News, March 20th, the market widely expects that the Bank of England will keep interest rates unchanged this week, in line with the action taken by the Federal Reserve on Wednesday. However, later this year, it may still cut rates more aggressively than the Fed. Like the Fed, the Bank of England expects inflation to continue to slow in the coming months, but it wants to ensure that the downward trend in inflation is on track and avoid a rapid reduction in borrowing costs.

However, the UK economy has been much weaker than the US. Following flat growth in the third quarter, the UK economy grew by just 0.1% in the fourth quarter, barely avoiding a recession. While concerns about the Russia-Ukraine conflict and the impact of Trump's tariffs on global economic growth are affecting the UK, the UK economy also has its own issues. The government led by Prime Minister Stamer has been working hard to restore confidence among consumers and businesses in the outlook.

As for the Bank of England, it has stated that it is taking a "gradual and cautious approach" to lowering interest rates; however, with the economy stagnating, the direction of interest rates is clear. Nomura Securities economist George Buckley said: "We expect the central bank to keep interest rates unchanged in March, cut rates again in May," and then cut rates "at every meeting from here to February 2026 (including February 2026), with the terminal rate at 3.5%." (FXStreet)