Australia’s Economic Growth Slows in Q3 Despite Strong Investment Activity 
RBNZ Cuts Interest Rates Again as Inflation Cools and Recovery Remains Fragile 
BOJ Governor Ueda Meets Key Ministers as Markets Eye Policy Shifts Under New Leadership 
Bank of Korea Holds Interest Rates Steady as Weak Won Limits Policy Flexibility 
Japan’s Nikkei Drops as Markets Await Key U.S. Inflation Data 
European Oil & Gas Stocks Face 2026 With Cautious Outlook Amid Valuation Pressure 
Oil Prices Rise as Ukraine Targets Russian Energy Infrastructure 
Dollar Weakens Ahead of Expected Federal Reserve Rate Cut 
BOJ’s Noguchi Calls for Cautious, Gradual Interest Rate Hikes to Sustain Inflation Goals 
Fed Rate Cut Odds Rise as December Decision Looks Increasingly Divided 
Gold Prices Edge Higher as Markets Await Key U.S. PCE Inflation Data 
Asian Currencies Steady as Rupee Hits Record Low Amid Fed Rate Cut Bets 
Asian Currencies Steady as Markets Await Fed Rate Decision; Indian Rupee Hits New Record Low 
Britain is set for solid economic growth and lower inflation in 2024, but the Bank of England (BoE) has little room for further interest rate cuts, according to the National Institute of Economic and Social Research (NIESR).
NIESR forecasts a 1.5% GDP growth rate this year, exceeding the BoE’s estimate and the 1.3% average from a recent Reuters poll. The think tank expects the economy to strengthen further in 2025 as government spending increases.
Despite concerns over weak business sentiment and global trade uncertainties, NIESR is more optimistic than the BoE, which projected sluggish growth and rising inflation. The think tank predicts inflation peaked at 3.2% in January and will average 2.4% in 2024 before falling to 2% by 2026. In contrast, the BoE expects inflation to hit 3.7% in Q3 2024 and remain above target until 2027.
Given this outlook, NIESR believes the BoE can only cut rates by 0.25% this year and once more in 2026, bringing rates to 4%—a level considered neutral for inflation control. Meanwhile, investors foresee long-term rates between 3% and 3.5%.
The report also highlights increasing pressure on governments to borrow for the green transition and aging populations, which could contribute to a higher neutral interest rate.
Finance Minister Rachel Reeves remains on track to meet fiscal rules when the Office for Budget Responsibility updates its forecasts next month. However, NIESR urges more focus on long-term debt management.
As the UK navigates economic shifts, expectations for growth and inflation remain key drivers of monetary policy, with limited room for BoE rate cuts.
