Interest rates: Bank of England could be 'more aggressive' on cuts

Published On Oct 3, 2024, 3:21 AM

Andrew Bailey, the governor of the Bank of England, suggested that the bank might take a more aggressive approach to cutting interest rates if inflation allows for it. The Bank recently decreased its interest rate from 5.25% to 5%, marking the first rate reduction in over four years. Additionally, Bailey mentioned that current geopolitical issues, particularly in the Middle East, are being monitored closely due to their potential impact on oil prices and inflation rates.

Stock Forecasts

With potential interest rate cuts on the horizon, financial institutions and sectors that benefit from lower borrowing costs may experience positive growth. Additionally, consumer spending could increase if rates decline further. Banks and real estate-related stocks could be directly affected depending on interest movements.

However, if inflation continues to rise due to external factors like oil prices, the Bank's ability to cut rates could be limited, which might negatively impact the broader market. Stocks associated with consumer goods may also be negatively affected if inflation pressures persist.

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