Institutions: The Bank of England is expected to slow down interest rate cuts in the Fed's footsteps, but more in the future

On March 20, Jinshi Data reported that the market generally expects the Bank of England to maintain interest rates this week, in line with the Federal Reserve’s actions on Wednesday. However, later this year, it could still cut rates more significantly than the Federal Reserve. Like the Federal Reserve, the Bank of England expects inflation to continue to ease in the coming months, but it wants to ensure that the decline in inflation is on track and avoid reducing borrowing costs too quickly. However, the UK economy has been much weaker than that of the US. Following a flat third quarter, the UK economy grew only 0.1% in the fourth quarter, barely avoiding recession. Concerns over the impact of the Russia-Ukraine conflict and Trump’s tariffs on global economic growth have affected the UK, but the UK economy also faces its own issues. The government led by Prime Minister Starmer has been working to restore consumer and business confidence 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 trend in interest rates is clear. Economists at Nomura Securities, led by George Buckley, stated: ‘We expect the Bank to keep rates unchanged in March and cut rates again in May,’ followed by rate cuts at every meeting from here until February 2026 (inclusive), with a terminal rate of 3.5%.