An influential economic research firm predicts interest rates will fall to 2.5 per cent by late 2027, a much bigger drop than the 3.75 per cent market consensus.
However, Oxford Economics believes the downward momentum will continue through 2026 and 2027, with rates settling at around 2.5 per cent.
Outlier: Oxford Economics has raised its long-run forecast for interest rates from 2% to 2.5% but it's still much lower than markets expect.
Economists at Oxford Economics think the Bank of England will cut interest rates far further than financial markets are currently forecasting.
Andrew Goodwin, chief UK economist at Oxford Economics says the difference is partly because financial markets are anticipating higher inflation than they are, but also partly because of demographic changes.
