Bloomberg also think the MPC could make a tweak to its guidance to acknowledge downside risks to growth and the labour market have intensified. They don’t expect it to ditch the line that “a gradual approach to removing monetary policy restraint remains appropriate” just yet. Bloomberg view that as consistent with a quarterly pace of cuts in 2025 – their base case and probably the central view of the majority of the committee.

But a nod to risks would put the possibility of sequential cuts on the table if the economy and the jobs market continue to disappoint. If that scenario materialized, they would expect the committee to move to a neutral level more quickly. Inflation, which is likely to remain above target in 2025, would prevent more aggressive action – it would take a significant adverse shock for rates to be pushed below neutral.