UBS Predicts Bank of England Halt in Rate Cuts Next Week, With Next Cut in November

UBS expects the Bank of England to pause interest rates next week, with a potential next rate cut in November. The bank's current deposits stand at $745.8 billion, and loans at $580 billion. The Bank of England has raised rates by 0.5% since December, and UBS expects a pause due to concerns about the impact on the UK economy.

UBS has indicated that the Bank of England is likely to pause interest rate cuts next week, with a potential next rate cut scheduled for November. The bank's current deposits stand at $745.8 billion, while loans are at $580 billion. This expectation comes amidst concerns about the potential impact of interest rate cuts on the UK economy.

The Bank of England has raised rates by 0.5% since December, and UBS's prediction of a pause in the rate cuts is driven by concerns about the economy's resilience in the face of higher borrowing costs. The central bank has been closely monitoring inflation indicators, with Federal Reserve Chairman Jerome Powell stating that the US economy is strong and there is no rush to cut interest rates J.P. Morgan strategists: The year 2025 is full of uncertainties, and the Federal Reserve may pause interest rate cuts!^[1].

UBS's view aligns with that of JPMorgan's chief market strategist Karen Ward, who expects the Federal Reserve to pause after December to assess the impact of President-elect Donald Trump's policies on the economy. Ward believes that the Federal Reserve may remain inactive in 2025 after a potential rate cut in December J.P. Morgan strategists: The year 2025 is full of uncertainties, and the Federal Reserve may pause interest rate cuts!^[1].

Additionally, UBS's prediction is supported by the recent decision by Swiss lawmakers to stick to the existing timetable for introducing new rules on bank capital quality, which could increase UBS's capital requirements by up to $3 billion Swiss lawmakers vote to move ahead on bank capital revamp^[2]. This decision may also influence the bank's strategy regarding interest rate cuts.

In Kenya, the Central Bank of Kenya's aggressive interest rate cuts have led to a significant surge in bank lending, with private-sector credit rising by 3.3% in July. This trend underscores the potential impact of interest rate cuts on economic activity and could provide insight into the Bank of England's decision-making process Kenya sees lending surge after seven central bank rate reductions^[3].

Overall, UBS's expectation of a pause in interest rate cuts by the Bank of England next week reflects a cautious approach to economic policy, with a focus on monitoring inflation and assessing the impact of various factors on the economy.