BOE Has Little Scope to Cut Rates Beyond 2025, Analysis Shows
- Bloomberg Economics puts neutral interest rate at 3% to 4%
- Estimate suggests four rate cuts in 2025 and just one in 2026
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The Bank of England can cut borrowing costs five more times to 3.5% before it runs the risk of overheating the economy and reigniting inflation, according to Bloomberg Economics.
Estimates by Chief UK economist Dan Hanson suggest the so-called neutral interest rate is between 3% and 4%, higher than previously thought. He assumes the mid-point — 1.25 percentage points below the current level — will be where rates settle.