BoE could cut rates four more times in 2025, says governor Bailey
The governor of the Bank of England has said that four more interest-rate cuts are on the cards for next year if the trajectory of the UK economy continues as expected.
After lowering the Bank Rate by 25 basis points to 4.75% in November – the Bank's second 25bp reduction since August – governor Andrew Bailey predicted on Wednesday that any future cuts would be "gradual".
In an interview with the Financial Times, Bailey suggested that current market expectations for four additional 25bp cuts in 2025 are broadly in line with what policymakers were envisaging.
The governor said that inflation – most recently at 2.3% in October – has been falling more rapidly than expected this time last year, though there is "distance to travel" to bring prices down in a sustainable manner.
"A year ago we were saying that inflation today would be around 1% higher than it actually is,” he said.