The Bank of England maintains interest rates, but is preparing for a more active reduction

On Thursday, the Bank of England left its key rate unchanged, as did the US Federal Reserve a day earlier. However, experts believe that the UK will need to cut rates faster this year. 

The regulator expects a slowdown in inflation, but intends to make sure that this trend is stable in order to prevent a hasty reduction in the cost of borrowing. The minutes of the meeting indicated that the approach to monetary policy is based on an analysis of current data, rather than on a pre-established strategy.

The UK economy is showing weakness: GDP growth in the fourth quarter was 0.1% after stagnating in the third. The January figures showed a decline again, and it was possible to avoid a recession only thanks to reserves. 

The economy is affected by both external factors, including the conflict in Ukraine, and internal problems. Keir Starmer's government, which came to power in July, has failed to restore business and consumer confidence by offering tax increases without incentive measures.

The Bank of England is taking a cautious approach, given inflation is 1% higher than the 2% target. Nomura forecasts that the rate will drop from 4.5% to 3.5% over the course of the year, which contrasts with the Fed's plans, which involve only two cuts of 0.25 percentage points.