HSBC economists have postponed their expectation for the Bank of England's first 25 basis point interest rate cut from August to November, due to sticky wage growth and inflation.
Senior economist Liz Martins wrote in a client report on Friday, "The decision to be made may be a 'delicate balance'."
She added, "We believe that wage growth and inflation are still sticky, especially if the Labor Party's plan includes another significant increase in the national living wage in April 2025."
Assuming the first rate cut in November, she predicts that the Bank of England will gradually reduce interest rates by 25 basis points every quarter and lower the benchmark interest rate to 4% by the end of 2025.