Federal Reserve and Bank of England Cut Interest Rates

Today the Bank of England cuts interest rates as expected by 0.25% to 4.75% pa.  Followed later today by the Federal Reserve also cutting rates by 0.25% to a range of 4.5% to 4.75% pa.

Both Jerome Powell in the US and Bank of England Governor, Andrew Bailey have warned that patience is required.  Rates are unlikely to be cut again soon as stubborn inflation remains both sides of ‘the pond’. 

Domestic markets (companies that trade locally  ‘in country’ rather than relying on international Markets reacted well to the news with both the S&P 500 and the FTSE 250, 350 and All Share all clmbing.

Comment

Whilst an interest rate cut was widely anticipated, it is also widely forecast that further rate cuts will slow.  We anticipate a wait of around 6-12 months before further rate cuts unless we swing into a deeper economic slowdown sooner rather than the 12-18 month forecast that we have made.