BOE is likely to begin a mitigation cycle

On 2024/8/1, the Bank of England is poised to begin the mitigation cycle by lowering the main base interest rate by 25 bps from 5.25%, which is the peak in 16 years, to 5%.

However, many investors believe that central banks may choose to stabilize interest rates due to concerns about inflation, so the decision is a delicate one.

The headline inflation rate stabilized at 2% in June and remained at a low level since 2021.

However, the service inflation rate was as high as 5.7%, which was higher than the Bank of England's forecast of 5.1 percent.

Meanwhile, the unemployment rate has remained at a high level since 2021, and although wage growth has slowed, it is still at a high level.

The Bank of England will also announce new growth and inflation forecasts.

Source: Bank of England