FTSE On Hold as Market Gears Up for BoE MPC Meeting, Government Set to Slash Regulators
Economist see BoE holding rates steady in caution of sticky inflation and Trump tariffs. Reeves seeks less regulation to help economic expansion.
- BoE to hold rates at 4.5%
- Inflation risks and extra Tariffs main concerns
- UK Chancellor to cut red tape
The FTSE opened down 0.35% on the day as the market takes some profits from Friday’s rally. Investors are looking at this week’s MPC meeting for clues on when the central bank might take further action.
BoE MPC Meeting
All 61 economists interviewed by Reuters forecast the MPC to keep rates on hold this Thursday. The BoE is grappling with a struggling economy and inflations risks as the forthcoming tariffs are considered to add price pressure.
The UK economy unexpectedly shrank for the month of January, according to data from last week. At the same time, inflation is persistently above the BoE’s 2% target.
Inflation concerns are heightened further by US tariffs, and Trump has announced a new round of tariffs to take effect on April 2.
Consumer expectations last week showed a jump in near- and long-term inflation expectations. Economists now see inflation as likely to reach 3% in 2025, up from the previous forecast of 2.8%.
FTSE Live Chart
Less Regulation, More Free Market
The UK Chancellor Reeves is seeking to cut red tape from regulators in a push to revive a faltering economy.
Reeves is to meet with health and environmental regulators today to lay out a plan to cut as many as 7 bodies.
“Today we are taking further action to free businesses from the shackles of regulation,” Reeves said in a statement.
The idea is to find public savings and unlock businesses tied down by red tape. The Chancellor will also meet with the FCA along with environmental bodies.
Reeves is going to cut back on environmental regulation that delays business projects because of things like bat habitat protection.
The minister has said that the finance ministry will work regulators to slim down their duties, to avoid wasting time in redundant practices.
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