On the change, Citi says that national insurance rate cuts, as well as personal tax cuts, are adding to risks to inflation and that could see the BOE hold rates higher for longer. This follows the plans announced by UK finance minister, Jeremy Hunt, on Wednesday to cut the amount that workers pay as contributions to the National Insurance system by 2% starting from January next year.
As for their overall BOE outlook, Citi expects 100 bps worth of rate cuts to come through in 2024 itself.