Oil Prices Hold Steady as Ukraine Tensions and Fed Cut Expectations Support Market 
BOJ Governor Ueda Highlights Uncertainty Over Future Interest Rate Hikes 
IMF Deputy Dan Katz Visits China as Key Economic Review Nears 
China Urged to Prioritize Economy Over Territorial Ambitions, Says Taiwan’s President Lai 
RBNZ Cuts Interest Rates Again as Inflation Cools and Recovery Remains Fragile 
Europe Confronts Rising Competitive Pressure as China Accelerates Export-Led Growth 
Fed Rate Cut Odds Rise as December Decision Looks Increasingly Divided 
UK Raises Deposit Protection Limit to £120,000 to Strengthen Saver Confidence 
European Stocks Rise as Markets Await Key U.S. Inflation Data 
Asian Markets Mixed as Fed Rate Cut Bets Grow and Japan’s Nikkei Leads Gains 
Asian Currencies Steady as Markets Await Fed Rate Decision; Indian Rupee Hits New Record Low 
BOK Expected to Hold Rates at 2.50% as Housing and Currency Pressures Persist 
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.
