Barclays: Stubborn inflation reduces chances of early BOE cut

High levels of inflation in the UK and the risk that this persists in the medium term reduce the chances of an early rate cut from the BoE, Moyeen Islam, fixed income strategist at Barclays, said in a note.

Historically, the gap between the last rate hike and the first rate cut is about six months, he said.

With policy now described as restrictive, the BoE’s MPC is now less concerned with the terminal level of interest rates and more concerned with “remaining sufficiently restrictive for a long enough time,” Islam said.