LONDON (Reuters) – The Bank of England’s most recently appointed interest rate-setter Alan Taylor said the central bank’s gradual approach to cutting borrowing costs was in line with recent market pricing for about four quarter-point cuts by the end of 2025.
“I think if you ask what does gradual mean right now, it’s aligned in our case closely to the market curve, so that would be in line with about 100 basis points over the next year,” Taylor told the Treasury Committee in parliament on Tuesday.
“But that doesn’t mean to say that’s what will unfold, if conditions are weaker, and in my own view (if the balance is) skewed to the downside risk now versus the upside risk of about a year ago, then we could go faster.”
He said the outcome could prove different, depending on economic conditions.
Markets were pricing about four rate cuts by the BoE by the end of 2025 before the government announced its big-spending budget on Oct. 30, but those bets have dwindled to between two or three since the budget and the election of Donald Trump as the next U.S. president.