Morgan Stanley: The possibility of a rate cut in the UK is seriously underestimated

Morgan Stanley stated that the possibility of a rate cut in the UK in the coming months is "severely underestimated." Earlier data on the UK labor market showed that wage growth was at its slowest since 2022. In a research report, Morgan Stanley said: "We believe that the likelihood of a rate cut in the second quarter has been severely underestimated," and noted that the UK labor market no longer appears to be "tight." Morgan Stanley expects the Bank of England to provide firmer guidance on a rate cut next week, and if such guidance is not given, the start of the rate-cutting cycle may be delayed until August. Morgan Stanley predicts a total rate cut of 100 basis points this year.