{"id":360396,"date":"2025-08-20T21:28:12","date_gmt":"2025-08-20T21:28:12","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/360396\/"},"modified":"2025-08-20T21:28:12","modified_gmt":"2025-08-20T21:28:12","slug":"why-the-boes-rate-cuts-may-be-off-the-table","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/360396\/","title":{"rendered":"Why the BOE&#8217;s Rate Cuts May Be Off the Table"},"content":{"rendered":"\n<p class=\"yf-1090901\">This article first appeared on <a href=\"https:\/\/www.gurufocus.com\/news\/3071265\/uk-inflation-shocker-why-the-boes-rate-cuts-may-be-off-the-table?utm_source=yahoo_finance&amp;utm_medium=syndication&amp;utm_campaign=headlines&amp;r=caf6fe0e0db70d936033da5461e60141\" rel=\"nofollow noopener\" target=\"_blank\" data-ylk=\"slk:GuruFocus;elm:context_link;itc:0;sec:content-canvas\" class=\"link \">GuruFocus<\/a>.<\/p>\n<p class=\"yf-1090901\">While inflation has <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2025-08-20\/why-uk-inflation-is-so-high-and-what-it-means-for-interest-rates\" rel=\"nofollow noopener\" target=\"_blank\" data-ylk=\"slk:cooled;elm:context_link;itc:0;sec:content-canvas\" class=\"link \">cooled<\/a> across much of the developed world, the UK is proving stubborn. Consumer prices jumped 3.8% year-on-year in July and are expected to breach 4% by Septemberdouble the Bank of England&#8217;s 2% target. The BOE has already slashed interest rates five times, trimming them to 4% from last year&#8217;s 5.25% peak. But that hasn&#8217;t been enough to rein in prices. Core drivers? Surging energy bills, labor costs, and a 26 billion payroll tax rolled out in Aprilall of which are pushing up input costs for businesses, many of whom are passing them on.<\/p>\n<p class=\"yf-1090901\">Underneath the surface, the structural headwinds look even more problematic. UK productivity shrank 1% in Q2 compared to last year, putting the country behind most of its G7 peers. Add in lingering Brexit-related trade frictions and food prices that are now nearly 40% higher than pre-pandemic levels, and it becomes harder to argue this is just a cyclical inflation blip. Some pressures, like the summer airfare spike, may prove temporarybut the BOE remains on edge about second-round effects as workers continue to seek higher pay to shield themselves from the cost-of-living squeeze.<\/p>\n<p class=\"yf-1090901\">Markets still expect a cut to 3.75% in November, but the BOE may hold back if wage growth doesn&#8217;t cool as expected. For investors, this means uncertainty lingersparticularly for UK-linked consumer names and housing-sensitive sectors. Even global players like Tesla (<a class=\"link \" href=\"https:\/\/finance.yahoo.com\/quote\/TSLA\" data-ylk=\"slk:NASDAQ:TSLA;elm:context_link;itc:0;sec:content-canvas\" rel=\"nofollow noopener\" target=\"_blank\">NASDAQ:TSLA<\/a>), which has exposure to the UK market, could feel ripple effects if inflation stays sticky and rate cuts get delayed. The BOE isn&#8217;t calling the peak yetand neither should the market.<\/p>\n","protected":false},"excerpt":{"rendered":"This article first appeared on GuruFocus. While inflation has cooled across much of the developed world, the UK&hellip;\n","protected":false},"author":2,"featured_media":299318,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[3,4],"tags":[748,17438,126688,393,21508,4884,12948,1144,712,126687,126689,16,15,1764],"class_list":["post-360396","post","type-post","status-publish","format-standard","has-post-thumbnail","category-uk","category-united-kingdom","tag-britain","tag-consumer-prices","tag-developed-world","tag-england","tag-food-prices","tag-great-britain","tag-gurufocus","tag-northern-ireland","tag-scotland","tag-septemberdouble-the-bank-of-england","tag-slashed-interest-rates","tag-uk","tag-united-kingdom","tag-wales"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115063220328886089","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/360396","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=360396"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/360396\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/299318"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=360396"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=360396"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=360396"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}