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VIEW CHANGE: BofA look for first cut in August 2024

BOE
  • BofA has updated its BOE forecast and now expects the first 25bp cut in August 2024 with quarterly 25bp cuts thereafter.
  • Previously BofA had not expected the first cut until February 2025.
  • They note "With faster disinflation, there is less need to keep real rates as high as we thought before... The UK will be the last of the major central banks to start the cutting cycle and it is likely to move slower, at least compared with the ECB."
  • Why not May? "The minutes suggest to us that rate setters are looking for very strong evidence before changing their bias from further hikes. And the upcoming budget in March could add another reason to be patient"

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