Morgan Stanley: Bank of England expected to cut interest rates in March following weak GDP in the fourth quarter.

Morgan Stanley strategist Bruna Skarica stated in a report that the UK's quarterly economic growth was weaker than expected, reinforcing the view that the Bank of England may cut interest rates in March. GDP growth in the fourth quarter was 0.1%, below the central bank's expected 0.2%. However, this data fell short of expectations mainly due to downward revisions to previous data, with November's GDP growth rate at 0.2%, instead of the initially reported 0.3%. Morgan Stanley expects economic growth to pick up from here. Skarica said, "With some help from the Bank of England and global economic growth, we believe that the country's economy may gather momentum throughout the year and continue into 2027 - but political uncertainty remains a significant downside risk to this view."