Investec's chief economist, Philip Shaw, said that the trend is clearly to cut interest rates at some point. It is not surprising that Bank of England deputy governor Ramsden voted in favor of a rate cut, considering his relatively dovish remarks a few weeks ago. The current situation is that different members emphasize different things when judging the sustainability of inflation, making it difficult to determine the committee's response function, and therefore more difficult to accurately determine the timing of the first rate cut. Our view is that the Bank of England will cut rates in June, which is still absolutely feasible. Obviously, this will depend on the data from now until then, but it will also depend on whether there are enough members in the Monetary Policy Committee who believe that the issue of inflation sustainability is no longer as it used to be.
