The Bank of England (“BoE”) maintained its base rate at 4.5% last week, prioritising a gradual approach amid persistent inflation and wage pressures. Markets are now assigning a 70% probability of a May rate cut, with only two reductions anticipated this year, fewer than economists forecasted. The Organisation for Economic Co-operation and Development (“OECD”) has downgraded UK growth projections for 2025 and 2026, citing global trade risks. Business sentiment remains cautious, with 57% of firms expecting a recession. Manufacturing output has weakened sharply, and insolvencies are rising. Consumer confidence is improving, but investment hesitancy persists due to fiscal uncertainty. Options traders are increasingly betting on more aggressive BoE rate cuts. However, the BoE is facing challenges, balancing weak growth with persistent inflation risks, particularly in the face of global trade tensions...

Stocks featured:

Compass Group, Kingfisher and Prudential

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