The Bank of England is set to start cutting interest rates in June, according to a City A.M. poll of economists, as inflation nears its target, the labour market cools and the UK takes its first steps out of recession.

Some 61% of the 23 economists surveyed thought the Bank would start cutting rates in June, narrowing their bets since last month’s survey.

Just 9% projected that rate cuts would start in May, compared with 43% last month, while just over a quarter – 26% – chose August. Just under half of the economists – 48% – expected the bank would cut rates three times in 2024, with some placing more optimistic bets for four (30%) and five cuts (9%).

The Bank’s Monetary Policy Committee is due to meet on Thursday 21 March for its next rate-setting vote. The benchmark Bank Rate currently stands at 5.25%.

Julian Jessop, economics fellow at the Institute of Economic Affairs, stated: “4% would be a good level for interest rates in the longer term, broadly consistent with 2% inflation and 2% growth in the real economy. Anything much lower than this would be a worrying sign that the UK is at risk of Japanese-style stagnation. Anything much higher would suggest that inflation is a bigger problem.”