As I’ve mentioned, I don’t like to get into mind-reading the Bank’s statements, and what they did (or didn’t) say. They can say whatever they want, but their actions are much more significant. However, it’s worth noting that the press release removed the usual ”prepared to raise further” language that we saw throughout 2023.
If you looked at this chart, you’d think the Bank had made some dramatic cuts in the past few months. In fact they’ve done nothing... which, combined with the US explicitly talking about cuts, was enough to bring optimism to the market. Bonds are a market, and reflect the mood and forward outlook about the economy and borrowing costs. Bond yields declined a huge 1.25% from October to Christmas, and then moderated over the past few weeks as we saw news of higher inflation.