Bank of England: No hubris

The Bank of England’s MPC cut the benchmark rate by 25 basis points to 4.25%, a move fully anticipated by analysts and markets. The vote was split three ways, reflecting the prevailing uncertainty and the MPC's desire to avoid the impression of groupthink and hubris. The central bank maintained its guidance for gradual and careful cuts, with no hints of a potential cut in June. However, a very soft April CPI print might push them over the edge. Despite this, our baseline forecast remains quarterly cuts, with two more reductions expected this year, bringing the policy rate to 3.75%, with downside risks.