Bank of England's Interest Rate Strategy

LONDON (Reuters) – The Bank of England's recently appointed interest rate-setter, Alan Taylor, stated that the central bank's gradual strategy for lowering borrowing costs aligns with current market expectations for about four quarter-point cuts by the end of 2025.

> "If you ask what does gradual mean right now, it's aligned in our case closely to the market curve, so that would be in line with about 100 basis points over the next year," Taylor told the Treasury Committee in parliament on Tuesday.

However, he cautioned that this plan could change if economic conditions weaken. "If the balance is skewed to the downside risk now versus the upside risk of about a year ago, then we could go faster," he noted.

The anticipated outcome may vary based on economic conditions. Market expectations had initially priced in about four rate cuts by the BoE by the end of 2025 but have since reduced to between two or three following the government's significant budget announcement on Oct. 30 and the election of Donald Trump as the next U.S. president.