BENGALURU, June 12 Reuters The Bank of England will start cutting interest rates in August, according to all but two of 65 economists polled by Reuters, and most of them expect at least one more reduction this year despite persistently high pay and services inflation.

One of the first central banks to start raising rates following the worst of the COVID pandemic, the BoE lifted Bank Rate by 515 basis points between December 2021 and August 2023 to a 16year high of 5.25 to tackle soaring price pressures in the economy.

Overall inflation eased to 2.3 in April, close to the central bank39;s 2.0 target, from a peak of 11.1 in October 2022. A hot job market has started slowing and official statistics on Wednesday showed the economy stalled in April, partly due to exceptionally rainy weather.

However, wage and services inflation, both watched closely by the BoE, are still around 6.

Only two of 65 economists polled expected the BoE to wait until September to cut rates instead of August. But all 24 who participated in both the latest and last month39;s poll and had previously forecast a cut on June 20 moved their call to August.

Financial markets are pricing only one BoE rate cut this year, in September.

While we are seeing some tentative signs of cooling in the labour market, service sector inflation remains persistently high and it is likely the MPC would want to wait until the next set of forecasts and a few more data points before it embarks on its first rate cut, said…