Interest rates of the United Kingdom will be reduced to 4.25%, since the Bank of England facilitates costs for borrowers, while digesting the impact of US tariffs on the economy.
Most economists expect rates to be reduced by 0.25 percentage points on Thursday.
Sandra Hornsfield, an investor economist, said it is an “almost certainty” that the costs of loans will be relieved even more, and most participants in the prices of financial markets in a cut.
Inflation has fallen in recent months, which probably indicates to political leaders that interest rates, which are used as a tool to control inflation, can continue to fall.
The inflation of the consumer price index (CPI) slowed 2.6% in March, 2.8% in February, according to the latest official data.
And what is more important, the rate of inflation of services, a metric closely observed by the Bank of England, fell to 4.7% of 5%.
“However, the new question now for the MPC (monetary policy committee) to consider is how the trade policy changes of the United States have changed the perspective of the United Kingdom inflation,” said Horsfield.
“What makes this month's decision is that practically everything has indicated in the direction of the lowest inflation pressure in the United Kingdom.”
Economists have said that it is likely that the economic growth of the United Kingdom will slow down high levels of uncertainty, with some companies prepared to stop investments and consumers to reduce spending.
Others have said that countries such as China, in the face of the highest positions in exports to the US, will return to the lowest import prices and import prices for other countries, which could result in lower prices for consumers in the United Kingdom.
Combined with other factors, including a weaker US dollar and the fall in oil prices, this could exert a downward pressure on inflation, according to economists.
Horsfield said that while the MPC continues to calculate the possible effects, its “game plan will be to assure the public and the markets that are ready to act if necessary.”
Edward Allenby, an economist from the United Kingdom for Oxford Economics, agreed that “beyond the decision of May's interest rate, the most important question is how American fees ads are influencing the thought of the MPC.”
Allenby predicted that the MPC could degrade its short -term growth and inflation forecasts on Thursday.
Thursday's decision will be the “first opportunity for the MPC to clearly establish how recent developments have shaped their perspective and what members of the committee will focus before the decisions of future interest rates,” he said.
Meanwhile, the Central Bank of Europe reduced interest rates last month, and said that “exceptional uncertainty” about commercial policy meant that future fees decisions would have to be taken at a meeting through the meeting.
