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Bank of England meeting: "This week’s rate decision represents a pivotal moment"

ended 03. February 2025

Experts have shared their views on the Bank of England rate decision later this week. One economist said: “This week’s rate decision represents a pivotal moment, with markets counting on a rate reduction to stabilise the economy and stave off recession.” Meanwhile, a broker added: “The mortgage market is screaming out for it.” A business finance expert said simply: “A rate cut would be a welcome boost to the economy and to many beleaguered small businesses. Views below.

8 responses from the Newspage community

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Gabriel McKeown
Political & Economics Writer at Sad Rabbit - Substack Newsletter
With markets pricing in a near-certain rate cut this week, the Bank of England faces a moment of reckoning as Britain's economic balancing act continues. However, surging volatility following Trump’s Tariff Tempest has turned global markets into a pressure cooker, and the Pound finds itself in the crosshairs of a widening transatlantic trade conflict. Consequently, policymakers face further harder choices, and for the BoE, if Sterling weakens amid deteriorating trade conditions, inflationary pressures could intensify, limiting the room to manoeuvre on monetary policy. Additionally, rate cuts may become politically unpalatable if markets perceive them as a capitulation to inflationary forces despite prolonged currency volatility and a steady creep upward from gilts, seeing the cost of borrowing for the UK government increase significantly. This week’s rate decision represents a pivotal moment, with markets counting on a rate reduction to stabilise the economy and stave off recession.
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Tony Redondo
Founder at Cosmos Currency Exchange
Those on the MPC are likely saying in private: "Thanks, Rachel, for putting us in an impossible position. We need to cut rates to avoid a recession after your disastrous Budget, but doing so risks fuelling inflation. If we don’t cut, a recession is almost certain—classic stagflation." Publicly they will likely say: "Our priority is price stability and economic growth. With business and consumer confidence plummeting, insolvencies rising and the job market deteriorating, we must act. However, inflation risks remain, especially with rising wages or external shocks." On balance, I’d advocate a cautious 0.25% rate cut to support the economy while maintaining inflation control.
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Marcus Wright
Managing Director at Bolton Business Finance
A rate cut would be a welcome boost to the economy and to many beleaguered small businesses. Business confidence has taken a battering with the tax rises such as NI announced in the Budget and the economy is teetering on the edge of recession. A cut of 0.5% or more would provide a great boost, however we are likely to see the usual cautious and lacklustre approach with a small 0.25% cut. That's better than nothing, though.
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Ben Perks
Managing Director at Orchard Financial Advisers
The Bank of England should cut rates. The mortgage market is screaming out for it. They hold the key to unlocking better rates for borrowers and they need to use it. Not only will the door open for better rates, but a renewed optimism. They can stimulate the market and improve the economy with the simple decision to cut the base rate.
I just hope they have the bottle.
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Michelle Lawson
Director at Lawson Financial
The Bank of England should absolutely cut rates. Sadly, I imagine that a cut is as much a done deal as the new runway at Heathrow. Yes it may be temporarily inflationary but something needs to happen to bring back some positivity for borrowers amid all the doom and gloom. A rate cut could be just the tonic the economy needs.
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Rohit Kohli
Director at The Mortgage Stop
The UK economy is limping along, with growth barely measurable and business confidence lower than a winter thermostat in an unheated flat. Retail sales, once a festive pillar, have crumbled, and job cuts are mounting from retailers. The Chancellor’s latest proposal, like a third runway at Heathrow, feel like post-Budget fantasies designed to outlive accountability. The Bank of England must cut rates to avoid deeper stagnation, but with caution. 25 basis points could ease the strain without fueling runaway inflation. Still, rates alone can’t fix a government strategy that lacks urgency. Bold fiscal action is needed, or we’ll be stuck debating slow growth while other economies race ahead.
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Dariusz Karpowicz
Director at Albion Financial Advice
The Bank of England faces a critical decision this week as the UK economy continues to show signs of stagnation. With business confidence at rock bottom and the mortgage market crying out for relief, the case for an interest rate cut grows stronger by the day. The real question isn't whether to cut, but rather the size of the reduction. While a cautious 25 basis point trim might appease inflation hawks, it may not provide the economic stimulus needed to lift Britain out of its current malaise. The MPC's decision on Thursday could prove pivotal for both market sentiment and economic recovery.
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Elliott Culley
Director at Switch Mortgage Finance
A rate cut would help the mortgage market and the economic outlook of the UK in general. The economy has slumped and a boost is needed to the market after rates have stagnated recently.