U.K. Inflation Expected to Fall, Enabling Further BOE Rate Cuts -- Market Talk

Dow Jones01-06

1317 GMT - The U.K. inflation rate is projected to decline in the coming months, raising prospects of more interest-rate cuts from the Bank of England, HSBC economist Elizabeth Martins says in a note. Lower household energy bills and slowing wage growth are expected to push the U.K. annual inflation rate down to 2.1% in April and stay close to 2% thereafter, Martins says. "We expect further BOE rate cuts in April, July and November, taking us to 3.00% by the fourth quarter 2026 - though there are upside risks to this forecast." U.K. money markets currently fully price in one 25 basis-point rate cut in 2026 and a possible second reduction in the second half of the year, LSEG data show. (miriam.mukuru@wsj.com)

 

(END) Dow Jones Newswires

January 06, 2026 08:17 ET (13:17 GMT)

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