BoE's Taylor: Disinflationary forces are building

Joshua Gibson FXStreet

Bank of England (BoE) rate-setter Alan Taylor noted late on Friday that downside pressures are continuing to build up underneath the UK's economy, signaling that early rate cuts may be needed ahead of a questionable forecasting period.

Key highlights

Would expect bank rate to normalise close to 2.75%, absent shocks.

Would expect bank rate, should MPR inflation projections be close to what we actually see, at around 3% by end of 2026.

Better to cut rate now and hold for longer later rather than hold too long and cut in a hurry.

Disinflationary forces are building this year.

Insurance against deteriorating demand is advisable.

A soft landing for the UK economy is at risk.

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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