In a significant shift in forecasts, Bank of America announced it has reduced the number of interest rate cuts expected by the Bank of England in 2025, now predicting only two cuts instead of three, amid continued caution in UK monetary policy.
According to the bank's estimates, the Bank of England is expected to make its first interest rate cut at its August meeting, followed by another in November, reflecting a more conservative approach compared to previous estimates that indicated a possible cut in September as well.
These changes place Bank of America among the financial institutions that have retreated from their view of successive interest rate cuts, while major banks such as Goldman Sachs and Citi still expect a more flexible approach.
The bank expects interest rates to stabilize at 3.50% by the end of the current cycle, indicating a more cautious monetary policy approach to addressing inflation and economic risks.
These expectations come as markets continue to closely monitor the Bank of England's decisions, amid divergent views on the timing of the moves and their impact on the British economy.
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