Golden Finance reports that according to the latest news, the pricing of UK interest rate futures indicates that the Bank of England is highly likely to cut interest rates for the remainder of 2025, with the rate cut expected to reach 46 basis points. This expectation has risen compared with the 39 basis points before the release of the labor market data, indicating that the market’s expectations for a shift in the Bank of England’s monetary policy are changing.
The monetary policy of the Bank of England has always been influenced by multiple factors, and the situation of the labor market is one of the key factors. Generally speaking, the performance of the labor market will directly affect the central bank’s judgment on the economic situation and thereby influence its monetary policy decisions. After the release of the labor market data this time, the increased expectations of interest rate cuts reflected in the pricing of interest rate futures may imply that the market believes that certain changes in the labor market have increased the possibility of the Bank of England further easing monetary policy in the future.
Previously, the Bank of England cut interest rates for the first time that year on February 6, 2025, reducing the benchmark interest rate by 25 basis points to 4.5%. At that time, after a series of weak growth data in the UK were released, economists generally expected that the Bank of England would cut interest rates at that meeting. The current pricing of interest rate futures further indicates that the market’s confidence in the Bank of England’s subsequent rate cuts is growing. However, market expectations may not fully and accurately reflect the actual actions of the Bank of England. There is still a certain degree of uncertainty regarding the monetary policy of the Bank of England in the future. It is necessary to closely monitor various economic data of the UK and the policy statements of the central bank.
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