BoE MPC’s rate hold today was widely expected. A noteworthy nod to data dependency in the minutes, alongside unchanged forward guidance, suggests upcoming inflation and labour market data will be key to a possible Q4 cut

One interesting nugget from today's MPC minutes is that there were two rounds of voting to reach a decision. From what I can gather, this is the first time the MPC has held two votes on interest rates since the BoE became independent - underlining just how finely balanced the decision to cut was

These themes of weak demand, economic uncertainty, and higher costs following the Budget were echoed in the wholesale sector, which reported one of the sharpest sales declines in the past four years

UK #retail sales volumes fell more slowly in the year to April, according to the latest CBI DTS. Firms remain pessimistic about the outlook due to the impact of Autumn Budget measures, persistently weak consumer sentiment, and global economic uncertainty

UK #inflation coming down to 2.6% in March is welcome news, particularly ahead of a likely pick up in price pressures in April. Higher US tariffs add some uncertainty to the outlook, as they could put both upward and downward pressure on inflation in the UK

UK #GDP grew by a stronger-than-expected 0.5% in the month to February, which provides some hope that the economy may have seen a solid expansion over the first quarter

UK #inflation eased slightly to 2.8% in February (from 3.0% in January), broadly in line with the Bank of England's expectations. Looking ahead, price pressures are set to rise again in April, driven by higher energy costs, regulated price increases, and the passthrough of Autumn Budget measures

The latest CBI Distributive Trades Survey found that UK retail sales volumes dropped at a sharp pace in the year to March. Retail and wholesale firms reported that global trade tensions and the Autumn Budget are weighing on consumer and business confidence, which is leading to reduced demand

The Bank of England MPC kept rates unchanged at 4.5% in their latest meeting, in line with expectations. The MPC continued to emphasise a "gradual and careful approach" to lowering rates, which chimes with our forecast of quarterly 25bp cuts through Q1 2026 (to 3.5%)

The latest UK labour market data suggested that employment is broadly unchanged, while pay growth remains strong (at 6.1% in the private sector).

Looking ahead, CBI business survey data continue to point to a deterioration in hiring intentions post-Budget

Household inflation expectations continue to tick up, according to latest Bank of England / Ipsos survey. These data are likely to reinforce the MPC's "gradual and careful" approach to lowering interest rates, in order to avoid a de-anchoring of expectations

UK #GDP contracted slightly in January (by -0.1% m/m), mostly driven by a decline in production sector output. Monthly GDP data has been relatively volatile lately, but, looking through the noise, economic momentum seems to be subdued

UK retail sales fell again in February, according to our latest Distributive Trades Survey. The outlook remains downbeat, with firms expecting annual sales to drop in March and investment intentions deteriorating to the greatest extent in nearly six years

UK CPI #inflation rose by a stronger-than-expected 3% in January, highlighting the challenges facing the BoE MPC as they seek to rein in persistent price pressures. We expect inflation to remain above target this year, partly reflecting the impact of Autumn Budget measures

UK GDP grew by 0.1% in Q4 2024, above consensus estimates of a 0.1% decline. Growth over the quarter was driven by government spending and investment, while private sector demand fell. Looking at 2024 as a whole, GDP increased by 0.9% (in line with our recent forecast)