Financial Digest

Financial markets scale back expectations of interest rate cuts

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Financial Markets,Interest Rate Cuts,Inflation

Investors believe that the Federal Reserve and other central banks will delay interest rate cuts due to stronger than expected inflation in the US and other nations. Higher interest rates mean higher borrowing costs for ordinary people.

Financial markets are scaling back expectations about interest rate cuts in countries such as the UK this year. Many Western nations have imposed rate hikes in recent years as part of attempts to bring down soaring inflation - which has now started to ease. However, new figures in the US on Wednesday showed that inflation was stronger than expected in March - and the pace of price rises remains 'sticky' in other nations too.

Her comments echoed similar recent remarks by her hawkish MPC colleague Jonathan Haskel to the same newspaper. A lot depends on upcoming official economic data - such as the next inflation figures for the UK, which are due to be published on Wednesday 17 April. However, financial markets are growing pessimistic. Investors have pushed back their expectations and now believe it is most likely that the Bank will wait until August before making a 0.25 percentage point cut.

 

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