Bank of England Faces Pressure to Accelerate Interest Rate Cuts After Weak UK Economic Data

Sluggish retail sales, cooling inflation, and rising financial burdens intensify calls for monetary easing in 2025.

UK retail sales fell 0.3% in December, disappointing forecasts and marking a weak holiday trading period, with broader quarterly sales down 0.8%.
The UK economy showed minimal growth in November, with GDP stagnating over three months, raising concerns of a potential recession.
Markets now anticipate at least three Bank of England interest rate cuts in 2025, with the first expected in February, potentially lowering the base rate from 4.75% to 4%.
High borrowing costs, tax increases, and slowing job market growth are straining households and businesses, contributing to reduced consumer spending and hiring.
While inflation cooled to 2.5% in December, easing some pressure, volatility in bond markets and elevated mortgage rates remain significant challenges for the UK economy.