Jin10 Summary: Key Highlights of the Bank of England's May Interest Rate Decision

GoldenOctober2024 · 2025-05-08T11:26:21+00:00

1. Interest rate decision: Cut interest rates by 25 basis points, lowering the benchmark interest rate from 4.5% to 4.25%, the fourth rate cut in this cycle. 2. Voting ratio: 5 members support a 25 basis point interest rate cut, 2 support a 50 basis point interest rate cut, and 2 advocate that interest rates remain unchanged. 3. Wording adjustments: The Bank of England kept the wording on interest rate guidance unchanged, saying a gradual and prudent approach remains appropriate. 4. Economic forecast: GDP growth of 1% in 2025 (0.75% in February), 1.25% in 2026 (1.5% in February) and 1.5% in 2027 (1.5% in February). 5. Inflation forecast: CPI at 2.4% in one year (3% forecast in February). Two years later, the CPI came in at 1.9% (2.3% forecast in February). Three years later, the CPI came in at 1.9% (from 1.9% forecast in February). 6. Tariff Implications: In the longer term, tariffs may push UK inflation up slightly. The increase in trade tariffs means that the global growth outlook has weakened, but the drag on UK growth and inflation is likely to be smaller. 7. Market impact: GBP/USD rose 70 points against the US dollar in the short term, and traders lowered their bets on the Bank of England to cut interest rates, expecting a 20% probability of a rate cut in June.

GoldenOctober2024

2025-05-08 11:26:21

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Interest rate decision: Cut interest rates by 25 basis points, lowering the benchmark interest rate from 4.5% to 4.25%, the fourth rate cut in this cycle. 2. Voting ratio: 5 members support a 25 basis point interest rate cut, 2 support a 50 basis point interest rate cut, and 2 advocate that interest rates remain unchanged. 3. Wording adjustments: The Bank of England kept the wording on interest rate guidance unchanged, saying a gradual and prudent approach remains appropriate. 4. Economic forecast: GDP growth of 1% in 2025 (0.75% in February), 1.25% in 2026 (1.5% in February) and 1.5% in 2027 (1.5% in February). 5. Inflation forecast: CPI at 2.4% in one year (3% forecast in February). Two years later, the CPI came in at 1.9% (2.3% forecast in February). Three years later, the CPI came in at 1.9% (from 1.9% forecast in February). 6. Tariff Implications: In the longer term, tariffs may push UK inflation up slightly. The increase in trade tariffs means that the global growth outlook has weakened, but the drag on UK growth and inflation is likely to be smaller. 7. Market impact: GBP/USD rose 70 points against the US dollar in the short term, and traders lowered their bets on the Bank of England to cut interest rates, expecting a 20% probability of a rate cut in June.

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