Fed Confirms Rate Cut Amid Weak Jobs, BoE Expected to Pause Rates

Economic indicators from the U.S., U.K., and Canada reveal diverging central bank policies amid labor market weaknesses and persistent inflation concerns. The Bank of England is expected to maintain its 4% interest rate through the end of 2025, with policymakers cautious due to sticky inflation and the government's upcoming budget influencing monetary policy decisions. In contrast, U.S. Federal Reserve officials are widely anticipated to cut interest rates starting in September, following disappointing job growth reports and revisions showing weaker labor market conditions than previously reported, despite ongoing inflation risks. Market expectations now fully price in a Fed rate cut in September, with a significant probability of multiple cuts by year-end, reflecting stagflation fears and a shift in employment growth outside healthcare sectors. Meanwhile, the Bank of Canada faces uncertainty about a September rate cut, as weak August employment data and rising unemployment suggest economic softness, but final decisions hinge on forthcoming inflation reports. Across these economies, the interplay between labor market softness and inflation dynamics is shaping cautious yet divergent monetary policy approaches.