The Bank of England is expected to hold the base rate at 4.25% on Thursday this week, Hargreaves Lansdown has predicted.
This is due to a spike in inflation, which is expected to peak at 3.7% this year, before falling back.
Susannah Streeter, head of money and markets, Hargreaves Lansdown, said: “The chances of an interest rate cut this month look super-slim, given that inflation is expected to remain elevated.
“Even though high wage growth is easing off and vacancies are falling as firms hold back from recruiting, pay growth is still outpacing inflation.
“Add Trump’s tariffs into the mix of uncertainty, and policymakers are set to stay in wait-and-see mode, taking longer to assess the path ahead for prices. “
Two base rate cuts are still expected this year – in September and December.
Streeter added: “Now that a deal appears to have been reached between the US and China, which will see the threatened triple digit tariffs on Chinese imports reduced sharply, there may be hopes that the drag to the global economy and the UK won’t be as severe as had been feared.
“This could help restore some business confidence and see a small uptick in hiring – which could keep wage inflation that bit more stubborn.
“However, given a trade deal with the UK is yet to be signed, sealed and delivered – and other nations are still in the queue for talks, further unpredictable moves can’t be ruled out. Policymakers will keep being driven by the data and wariness is set to stay the theme for a while.”
Bank base rate cuts would serve as a boost to mortgage holders, as a lower base rate generally corresponds to cheaper rates.
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