The Bank of England may accelerate the pace of interest rate cuts in the second half of the year

Bruna Scalica, an analyst at Morgan Stanley, said in a note that the Bank of England is likely to accelerate the pace or magnitude of interest rate cuts in the second half of 2025. Scalica said that economic growth is expected to slow in the coming months due to uncertainty about possible tax increases in the autumn budget. She said the decline in economic activity could prompt the Bank of England to cut interest rates at a faster pace than the market expects. Scalica said the Bank of England's base rate is expected to fall to 3.25% by the end of the year from the current 4.25%.