The Bank of England may once again beat the Federal Reserve in cutting interest rates, supporting the weak economy.

The Bank of England is expected to announce another interest rate cut this Thursday, leading the way in monetary policy easing ahead of the still cautious Federal Reserve. Faced with weak domestic economic growth, the Bank of England's move aims to boost the sluggish economic momentum. In contrast, the U.S. economy is in a different situation. Despite a decline in GDP in the first quarter of 2025, the Federal Reserve is currently more cautious about interest rate cuts due to strong overall growth last year. Fed Chair Powell warned on Wednesday that even as economic growth slows, inflation may rise, making rate cuts more difficult. The situation in the UK is the opposite. The British economy nearly stalled at the end of last year, and facing increased global uncertainty, especially external pressures caused by the Trump administration's imposition of tariffs, Bank of England officials believe that this uncertainty is more likely to push UK inflation down rather than up. Although both the Federal Reserve and the Bank of England initiated interest rate cut cycles last year, the Fed has paused action since the beginning of this year, while the Bank of England has maintained its pace of cutting rates once per quarter. Bank of England Governor Bailey has repeatedly emphasized taking a "gradual and cautious" approach to lowering rates. James Smith, analyst at ING Group, pointed out: "With high uncertainty and continued weak survey data, the Bank of England cutting rates by 25 basis points this month is almost certain. The most likely path is for the Bank to maintain its quarterly rate cut pace, with the rate cut cycle possibly longer than currently expected by the market." According to LSEG data, traders are currently betting that the Bank of England will cut its benchmark rate from 4.5% to 4.25% on Thursday, with a 90% chance of a rate cut. The market also expects a 40% probability that rates could be further cut to 3.5% by the end of the year. In February this year, the Bank of England significantly lowered its full-year economic growth forecast for 2025 from 1.5% to 0.75%. Although UK inflation in March remains at 2.6%, well above the Bank's 2% target, policymakers expect inflation to gradually fall within the target range by 2026. At the upcoming monetary policy meeting, the Bank of England will also release updated quarterly economic forecasts. It is worth noting that a member of the Bank of England's Monetary Policy Committee has previously voted multiple times in favor of faster and larger rate cuts, leading to market expectations that there is still a possibility of a substantial 50 basis point rate cut this week, albeit with only around a 10% chance.