UK interest rates could be cut this summer, the Bank of England’s outgoing deputy governor said on Monday, adding to the expectation that a first reduction in borrowing costs could come as soon as next month. Ben Broadbent, the Bank’s deputy governor for monetary policy, said that if the economy evolves as expected, borrowing costs could possibly be lowered “some time over the summer” in response to a steep fall in inflation. Broadbent said the main drivers of inflation over the past two years – the Covid-19 pandemic and the Ukraine war – have faded and the Bank was watching to check whether the longer-term domestic effects on prices would also decline before making a first cut in interest rates. Related: UK interest rate cut this summer ‘possible’ says Bank of England deputy governor – business live He said the monetary policy committee’s (MPC) nine members must assess how those “second-round effects” in domestic prices and wages change the course of inflation over the next two years. Analysts have diverged over the likelihood of a rebound in inflation later in the year, possibly forcing the Bank to pause its plans for rate cuts. The consultancy Capital Economics has forecast that...