BoE Set to Cut Rates Amid Economic Stagnation

The Bank of England is expected to cut its interest rates to 4.5% next week amid a stagnant economy and mixed economic signals. Investors anticipate further rate reductions as the BoE updates its economic forecasts. Current financial conditions and government borrowing costs could influence future fiscal policies.

The Bank of England is gearing up to lower interest rates next week, with investors anticipating a more accelerated pace of reduction than previously expected, amid a stagnating economy.

Economists predict a cut in the benchmark rate to 4.5% from 4.75% on February 6, when the BoE will unveil its latest economic growth and inflation forecasts. With a nearly 90% likelihood of a rate cut, investors will closely monitor the signals from the Monetary Policy Committee.

Driven by shifting expectations in the United States and concerns over Britain's fiscal health, financial markets have priced in almost three quarter-point cuts this year. This comes as government borrowing costs rise, potentially necessitating a dovish move by the BoE to keep economic growth on track.

(With inputs from agencies.)