Interest rates look set to be cut on both sides of the Atlantic this week despite uncertainty created by the Budget and the US presidential election. Higher inflation means slower rate cuts. The Chancellor’s £162billion borrowing binge and associated spending splurge are seen as likely to add to inflation pressures, something that would slow the path of rate cuts. The fall in inflation enabled the Bank to cut interest rates from 5.25 per cent to 5 per cent in August though it held fire in September. But following the Budget, traders are no longer betting on a pre-Christmas cut in December – and are pencilling in the next one in February.

Source: Daily Mail November 04, 2024 22:10 UTC