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Bank of England rate cut 'almost certain' after poor economic growth

The Bank of England is "almost certain" to cut interest rates next month after the economy slumped for a second month in a row, according to economists.

Rate cuts are heavily predicted for the coming months(Image: Getty Images)

Recent growth figures have sparked discussions about a potential interest rate reduction in August to revitalise the flagging º£½ÇÊÓÆµ economy.

The Office for National Statistics (ONS) disclosed on Friday that the º£½ÇÊÓÆµ economy experienced a second successive month of shrinkage with a 0.1 per cent contraction in May, as reported by .

Sanjay Raja, Deutsche Bank's chief economist, has stated that an interest rate cut at the Monetary Policy Committee meeting on 7 August is "almost certain" and anticipates further cuts in the last quarter of the year.

Since reaching a post-financial crisis peak of 5.25 per cent, the Bank of England has been progressively lowering rates, although external influences have slowed the process.

In June, the MPC maintained rates to combat persistent inflationary pressures as geopolitical tensions between Israel and Iran threatened to drive up energy costs.

Nonetheless, financial experts are now predicting a forthcoming rate cut.

Rob Wood, Pantheon Macroeconomics' chief º£½ÇÊÓÆµ economist, remarked: "Headline GDP disappointed, which will keep the market pricing a high probability of an MPC rate cut in August."

Wood noted that the upcoming consumer price index and labour market reports, scheduled for release next week, are "the only barriers" to a decrease in rates.