Respected Capital Economics analysts have released a fresh projection that indicates inflation and interest rates may decline more than the market has anticipated. Similar to the markets, Capital believes that base rate reductions from the present 16-year high of 5.25% to 5% will start in June (some experts believe May). However, Capital predicts that rates will drop to 3% in 2025, while the markets believe they will bottom out at 3.5–3.75%. Its forecast is hooked on the idea inflation will go lower than people are talking about at the moment. "Our forecast [is] that CPI inflation will fall below 1.0% later this year," Capital says. "We think rates will fall further than current market pricing. If we're right in thinking that inflation will drop below the Bank's 2% target in April and subsequently remain low, then the markets will likely come round to our view that the Bank will have to cut rates back to the neutral level of about 3% by the end of 2025 to avoid activity and inflation being too low."