UK Cuts Interest Rates to 4.25%

UK Cuts Interest Rates to 4.25%
Above: The Governor of the Bank of England, Andrew Bailey, speaks at a press conference on May 11, 2023 in London, England. Image copyright: Henry Nicholls/WPA Pool/Getty Images News via Getty Images

The Spin

Pro-establishment narrative

A quarter-point cut is a mature decision by the Bank, incentivizing growth whilst maintaining a steady approach amidst global uncertainty. Deflation has seen good progress since the height of the cost of living crisis, but with volatility expected and a new trade reality to contend with, cautious progress remains the best option for a recovering but vulnerable economy.

Establishment-critical narrative

The Bank has failed to deliver the bold steps necessary for monetary dynamism, opting for a lower than expected rate cut. The split decision shows a lack of clear direction or certainty in the bank's direction. A much more aggressive rate cut was in order to counter low growth and high inflation projections following Trump's aggressive global tariff regime.

Metaculus Prediction



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