BoE: On a Knife Edge

The Bank of England held rates in a tight 5-4 split, with TS Lombard forecasting a single rate cut in April followed by a long pause. While markets are pricing in aggressive cuts, strong UK activity data suggests the BoE will remain cautious as rates approach neutral.

Key Takeaways

• 1.The Bank of England held rates with a tight 5-4 split, which was more hawkish than the 7-2 expected by markets.
• 2.April is identified as the natural decision point for a rate cut due to visibility on the Spring Budget and March CPI data.
• 3.TS Lombard expects only one cut in April followed by a pause, disagreeing with market pricing of multiple cuts.

Table of Contents

• BOE: ON A KNIFE EDGE
• Savings Ratio — Gfk Consumer confidence (RHS, inverted)

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