The Bank of England is expected to have rates at 4.25% when the Monetary Policy Committee will meet next Thursday.
The interest rate rate panel lowered the basic rate by 25 basic points during their last meeting in May, but most economists predict that there will be a break before further reductions.
Canada Life Asset Management Investment Director for Liquidity Steve Matthews says: “We expect the Bank of England to keep the rates stable this month. Inflation remains persistent, labor data has been stable and GDP prints have been benign – which suggests that no immediate need for further cuts.
“Although the wider process for the rates stays down, the path now looks shallower than expected.
“Market prices suggest that the next step is unlikely before September, and possibly later.
“Added to this, the uncertainty surrounding American rates and trade policy is creating a more cautious worldwide background – nobody wants to make a step forward.
“This is a break, not a pivot, because the bank uses a measured, data -dependent approach in a stable, as a lethargic, economic environment.”
Oxford Economics Economist Edward Allenby says: “Recent data support the matter for further relaxation and must reduce the concerns of the MPC on inflation stickiness.
“But we don’t think the data has been weak enough to encourage the committee to increase the pace of cuts from the pace since last August.”
Allenby believes that the MPC will be aware of wage and baneng data in the next few months.
They will see how the labor market responded to the increases of April in the national insurance contributions of employers and the national living wage.
This year he expects another 25 BPS cuts in August and November.
Former MPC member Michael Saunders, who is now a senior economic adviser at Oxford Economics, predicts even greater cuts.
He says: “Given their emphasis on gradual relaxation, it is unlikely that the MPC will lower rates during this meeting.
“But the path to further relaxing becomes clearer.
“I expect that the MPC will lower the bank rate in August 25 BPS, with a relaxation of around 100 BPS in the coming year – just more than markets prize.”