BOJ Holds Interest Rates Steady, Upgrades Growth and Inflation Outlook for Japan 
Dow Hits 50,000 as U.S. Stocks Stage Strong Rebound Amid AI Volatility 
RBA Raises Interest Rates by 25 Basis Points as Inflation Pressures Persist 
Trump Signs Executive Order Threatening 25% Tariffs on Countries Trading With Iran 
Australia’s December Trade Surplus Expands but Falls Short of Expectations 
Japan Economy Poised for Q4 2025 Growth as Investment and Consumption Hold Firm 
Singapore Budget 2026 Set for Fiscal Prudence as Growth Remains Resilient 
U.S. Stock Futures Edge Higher as Tech Rout Deepens on AI Concerns and Earnings 
Oil Prices Slip as U.S.–Iran Talks Ease Supply Disruption Fears 
Bank of England Expected to Hold Interest Rates at 3.75% as Inflation Remains Elevated 
Vietnam’s Trade Surplus With US Jumps as Exports Surge and China Imports Hit Record 
ECB’s Cipollone Backs Digital Euro as Europe Pushes for Payment System Independence 
RBA Expected to Raise Interest Rates by 25 Basis Points in February, ANZ Forecast Says 
Britain is set for solid economic growth and lower inflation in 2024, but the Bank of England (BoE) has little room for further interest rate cuts, according to the National Institute of Economic and Social Research (NIESR).
NIESR forecasts a 1.5% GDP growth rate this year, exceeding the BoE’s estimate and the 1.3% average from a recent Reuters poll. The think tank expects the economy to strengthen further in 2025 as government spending increases.
Despite concerns over weak business sentiment and global trade uncertainties, NIESR is more optimistic than the BoE, which projected sluggish growth and rising inflation. The think tank predicts inflation peaked at 3.2% in January and will average 2.4% in 2024 before falling to 2% by 2026. In contrast, the BoE expects inflation to hit 3.7% in Q3 2024 and remain above target until 2027.
Given this outlook, NIESR believes the BoE can only cut rates by 0.25% this year and once more in 2026, bringing rates to 4%—a level considered neutral for inflation control. Meanwhile, investors foresee long-term rates between 3% and 3.5%.
The report also highlights increasing pressure on governments to borrow for the green transition and aging populations, which could contribute to a higher neutral interest rate.
Finance Minister Rachel Reeves remains on track to meet fiscal rules when the Office for Budget Responsibility updates its forecasts next month. However, NIESR urges more focus on long-term debt management.
As the UK navigates economic shifts, expectations for growth and inflation remain key drivers of monetary policy, with limited room for BoE rate cuts.
