Bank of England Seen Holding Rates Despite Lower Inflation, But Cuts Possible Later Amid Gloomy Outlook

• Bank of England expected to hold off on rate cuts despite incoming data showing inflation dropping to 2.5-year low • Governor Bailey has been more cautious than other central banks about pivoting to rate cuts • Sharp fall in wage growth and prediction of 2023 recession have led to bets on summer rate cuts • Services inflation resilience and high pay settlements still concern BOE re domestic price pressures • Subdued economic outlook for 2024 will help contain wage and price pressures