Institutions: The pullback in UK inflation has further boosted market expectations for interest rate cuts

Danni Hewson, head of financial analysis at AJ Bell, said that judging from the Bank of England’s interest rate expectations this morning, people are increasingly convinced that the Bank of England may start cutting interest rates as early as March next year. In fact, by this time next year, the economic situation could be very different, with more than a tenth of money market participants believing that interest rates could fall below 4% by December, she said in a note. She said the remarkable progress in cooling core and services inflation, which has been a tight concern for central bankers, suggests that inflation is weakening. But there is still a long way to go to reach the Bank of England’s 2% target, and the situation in the Red Sea may still have some repercussions in the future.