According to the Swiss Bank UBS, BoE more likely to cut in August rather than June

According to UBS, the Bank of England will approve its first interest rate drop in August—later than anticipated given the unexpectedly strong pace of inflation.

The Monetary Policy Committee's shift in forward guidance at its meeting on May 9, which allowed for a rate cut, and the anticipated drop in May inflation to about 2%, according to the Swiss bank's earlier assessment, would have allowed the BoE to implement the first 25 basis point rate cut in June.

However, the bank stated that recent inflation and labour market indicators had, overall, underwhelmed.

In addition to the data, UBS believes that the possibility of a June BoE cut has decreased due to recent political developments in the United Kingdom.

UBS now believes that the MPC will postpone the first cut until the beginning of August, or after the election, in light of Rishi Sunak's request for elections on July 4. They do admit some risk with their call, given that the May CPI will be released on June 19, one day before the BoE meeting.

As a result, UBS anticipates that the MPC's forward guidance and the split of the MPC vote (7-2) will stay intact, indicating no significant change in the assessment from the previous meeting. UBS stated that the June meeting would not be accompanied by fresh predictions or a press conference.

(Sources: investing.com, reuters.com)