Investors anticipate that the Bank of England will cut interest rates by 25 bps after keeping rates unchanged in its latest meeting. Additionally, inflation figures have shown signs of slowing down.

The Office for National Statistics (ONS) reported that the UK’s headline inflation rate slightly declined to 2.5% in December from 2.6% in November. Meanwhile, core inflation fell to 3.2% in December from 3.5% previously, marking its lowest level since September.

At the same time, domestic economic growth remains relatively weak. The latest ONS report indicated that the UK’s Gross Domestic Product (GDP) saw no growth in Q3 2024, down from an initial estimate of 0.6%. Furthermore, the Bank of England expects GDP growth to remain at 0% in the final quarter of 2024.

Source: Fxstreet