Quarterly Investment Outlook – Q3 2024
The global economy slowed down somewhat in the first half of the year, as rate hikes in the previous months moderated demand. However, growth rates are still mostly positive, without major recessions.
Headline inflation in the UK is already at the 2% target but services inflation remains stubbornly high at 5.7% in June, meaning a cut was never a certainty and the 5-4 in favour of cuts shows this.
However, we do still expect the BOE to cut rates by another 0.25% this year, probably in November. The decision to ease financial conditions should probably have been taken in June given the weakness of the economy, but the election was likely the reason why the Bank decided to delay the announcement until August.
Ben Seager-Scott, Chief Investment Officer
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