Bank is primed for a hat-trick of interest cuts

THE Bank of England (BoE) looks almost certain to cut interest rates tomorrow for the third time this year as it battles to revive a stalling UK economy.

- By Harvey Jones

Markets are betting on another 0.25 percentage point cut, which would reduce Bank Rate to 4%, following similar cuts in May and February. But analysts warn the BoE’s Monetary Policy Committee may be split on what to do.

Jeremy Batstone-Carr, European strategist at Raymond James, said falling GDP in April and May could push the Bank to act: “Slowing wage growth and signs of labour market weakness could tip the balance.”

Laith Khalaf, head of investment analysis at AJ Bell, said markets have all but priced in a cut, due at midday on Thursday: “Further reductions are pencilled in for November and next February, which would take Bank Rate down to 3.5% by the spring.”