PGIM Fixed Income's Katharine Neiss emphasizes that the Bank of England (BOE, Financial) must ensure a sustained downward trend in domestic inflation to accelerate any potential rate cuts. Recently, the BOE reduced interest rates by 25 basis points, aligning with market expectations.
Neiss highlights the risk of additional inflationary pressures in the UK. One factor contributing to this is the UK government's fiscal budget, which is more expansionary and inflationary than expected. Another factor is the potential strengthening of the US dollar following Trump's election victory, which could impact the UK's economy.
