Gauging where monetary policy neither restrains nor stimulates growth is increasingly key for policymakers as they seek to deliver a soft landing from the inflation shock of 2022 and 2023.
The Bank of England (BOE) can cut borrowing costs five more times to 3.5% before it runs the risk of overheating the economy and reigniting inflation, according to Bloomberg Economics.
Estimates by Chief UK economist Dan Hanson suggest the so-called neutral interest rate is between 3% and 4%, higher than previously thought. He assumes the mid-point — 1.25 percentage points below the current level — will be where rates settle.
