THE Bank of England is likely to cut interest rates from 4.5 per cent to 4.25 per cent on Thursday, economists predicted today.

Inflation has fallen in recent months, which is likely to indicate to policymakers that interest rates can decrease.

It comes as Consumer Prices Index (CPI) inflation slowed to 2.6 per cent in March, down 0.2 per cent from February, while the rate of services inflation fell to 4.7 per cent from 5 per cent.

Sandra Horsfield, an economist for Investec, said it is a “near-certainty” that borrowing costs will be eased further, with most participants in the financial markets pricing in a cut.

“The new question now though for the monetary policy committee to consider is how the US trade policy shifts have changed the outlook for UK inflation,” Ms Horsfield said.

Last week, Bank of England policymaker Megan Greene suggested that US trade tariffs could be “more disinflationary than they are inflationary.”