The Bank of England may adopt a more aggressive approach to interest rate cuts as inflation trends continue to improve. Governor Andrew Bailey recently hinted that the central bank might accelerate its rate-cutting plans, depending on further positive inflation developments. This shift marks a departure from the Bank's previously gradualist stance, which had been the norm since inflation had slightly exceeded the 2% target. The Bank cut rates to 5.25% in August, the first reduction since the pandemic, and it may lower them again before the year’s end, with markets already predicting a possible cut to 4.75% in the near future.

Bailey also pointed out that global geopolitical uncertainties, particularly in the Middle East, could affect financial markets, adding another layer of complexity to the Bank's policy decisions​.