The KPMG UK Chief Economist, Yael Selfin, has recently provided an interesting insight into the future of UK’s finance. She stated that the Bank of England would likely opt for an interest rate cut next month. Furthermore, she expects two more cuts in 2025.
According to Selfin, the anticipated rise in pay growth may only be temporary. She noted that the UK labour market is currently facing headwinds, which could impact pay growth. The unemployment rate, she added, rose to 4.4% but remained relatively low in the three months leading up to November.
The Impact of Interest Rate Cuts
An interest rate cut from the Bank of England can have various effects. For example, it can make borrowing cheaper, thus encouraging spending and investment. Consequently, this can stimulate economic growth.
However, interest rate cuts can also lead to lower returns for savers. In addition, if rates are too low, it could contribute to inflation. Therefore, the decision to cut rates is not taken lightly.
As the Chief Economist at KPMG UK, Yael Selfin’s predictions carry significant weight. If the Bank of England does indeed cut rates next month, followed by two additional cuts in 2025, it will be interesting to see the impact on the UK economy.
To conclude, Yael Selfin’s insights provide a glimpse into the potential future of the Bank of England’s monetary policy. However, it is important to remember that these are predictions. The actual decisions will depend upon a variety of factors, including the performance of the UK economy.
