U.K.'s Weak Growth Could Prompt BOE to Cut Rates Sooner -- Market Talk

Dow Jones02-12 16:27

0827 GMT - Given that U.K. economic growth came in weaker than the latest Bank of England forecasts, it raises the chance the central bank will cut interest rates as soon as March, RSM U.K. economist Thomas Pugh says in a note. GDP rose 0.1% in the final quarter of 2025, lower than the 0.2% penciled in by the BOE. However, growth should accelerate this year as uncertainty from November's government budget continues to unwind and falls in inflation start to show up as stronger consumer spending, Pugh says. The biggest risk now is a protracted Labour leadership contest that could open possible tax increases and inject renewed uncertainty into consumers and businesses, offsetting much of the improvement in the economic fundamentals, he says. (edward.frankl@wsj.com)

 

(END) Dow Jones Newswires

February 12, 2026 03:27 ET (08:27 GMT)

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