While most forecasts have predicted a gradual pulling down of interest rates by the Bank of England over the course of this year, the Monetary Policy Committee (MPC) have voted that it is too soon to take such action just yet.
Inflation is said to play a significant role in the decision-making process and, although inflation had been falling continuously during 2023, it experienced an unexpected – yet small – jump in the latest figures for December, to 4% from 3.9% in November. The current target is 2%, so the Bank of England will be taking this into account.
Analysts are currently predicting a “steep drop” in the consumer price index (CPI) over the next six months, so it appears likely that the Bank of England will be announcing “several” cuts to interest rates in 2024; but we may not see these until the end of the year.