Institution: UK economy stagnates, Bank of England expected to cut interest rates again

It is expected that the Bank of England will cut interest rates by another 25 basis points this week. Policy makers are weighing the signs of a weakening UK economy against the prospect of short-term inflation rebound. The financial markets have been betting that the Bank of England's Monetary Policy Committee will cut the official interest rate to 4.5% on Thursday, which would be the third cut in borrowing costs in more than six months. However, due to the possibility of inflation rising again in the UK, as well as the potential for a global trade war following US President Trump's imposition of tariffs on Canada, Mexico, and others, this week's monetary policy committee deliberations will become complicated. Jari Stehn, Chief European Economist at Goldman Sachs, said: "We believe that the recent weakness in growth data, deterioration in labor market indicators, and gradual rise in core service inflation will mean that a rate cut (of 25 basis points) is widely supported."