BoE Interest Rate Prep

On Thursday the 18th of September, at 07:00 ET, the Bank of England reveals their decision from it’s latest monetary policy meeting, and releases the rate statement.
Here are some views on what to expect.

General Expectations
Expectation from Analysts and Market Participants forecast the BoE to keep rates unchanged at 4%.

Investment Bank Commentary
Wells Fargo
The Bank of England (BoE) announces its latest monetary policy decision next week, and we expect policymakers to keep its Bank Rate on hold at 4.00%. The BoE’s most recent monetary policy statement struck a more cautious tone, introducing uncertainty around the pace of its easing cycle and placing greater emphasis on upside risks to inflation. While GDP growth has shown reasonable resilience in 2025 and sentiment surveys have generally improved in recent months—particularly following a recovery from September’s dip—this could point to stronger-than-expected growth ahead and support a longer pause in easing. However, this optimism is tempered by expectations that the U.K. government will tighten fiscal policy in the Nov. 26 Autumn Budget update, which would pose a headwind to growth and contribute to disinflationary pressures. Wage growth is slowing, and services inflation—a significant gauge of domestic underlying price pressures—has remained unchanged for two consecutive months. Combined with a high unemployment rate of 4.8%, a level not seen since May 2021, these factors support the case for a rate cut in Q4.

Although we do not expect a cut at next week’s meeting, we—along with market participants—will be closely watching the BoE’s updated economic projections and forward guidance. Looking ahead, we expect further easing before year-end, with a 25 bps rate cut likely at the December meeting.

MUFG
The BoE is likely to leave rates unchanged at 4.0% at its November meeting. We expect a somewhat dovish hold following the downside surprise on September CPI and further signs of cooling wage pressures, which are likely to be reflected in the updated projections. The vote is again likely to show considerable division on the MPC. We have pencilled in a 6-2-1 split with three dovish dissenters, including one calling for a larger 50bp cut.

While recent data has been generally soft, it’s probably not quite weak enough for the BoE to continue its cut-hold pattern after communications have pointed to a slowdown in the pace of easing. There is a substantial amount of data still to come before year-end and officials are likely to want more confirmation that inflation is now on a sustained downward path. It also seems prudent to wait for clarity on upcoming Budget measures. We maintain our call for the next cut in December, and then see rates falling to 3.25% next year.

This meeting will also see some notable communication changes stemming from the Bernanke review. The introduction of comments from individual MPC members in the minutes has clear potential to shape expectations around the pace and timing of future easing. With well-defined hawkish and dovish camps, the views of moderate members (and governor Bailey in particular) will be a key focus.

ING

Suddenly, a Bank of England rate cut on 6 November doesn’t look like such a remote possibility. Having virtually written it off, markets are now pricing a 25% chance of a 25bp cut. Inflation has almost certainly peaked. Food inflation – a critical concern at the BoE this summer – fell back in September and is now running half a percentage point below official forecasts. Services inflation looks better too; the Bank’s favoured measure of “core services” has slipped below 4%, we estimate. Private-sector wage growth, another key metric for the Bank, has also slowed markedly and is set to end the year below 4%, down from 6% at the turn of the year. This all comes at a time when the Bank is visibly divided on how problematic inflation really is. The hawks say that 4% inflation risks becoming entrenched. They worry that rising food prices will fuel inflation expectations, risking a repeat of the 2022 energy spike, which morphed into a much more persistent bout of price pressure.

The doves argue that times have changed: the jobs market has cooled a lot from three years ago. Workers lack the bargaining power – and firms the pricing power – to respond to higher inflation and protect their disposable incomes/margins the way they could after the pandemic. That’s our view too – inflation should look visibly better into next year. Yet this debate won’t be resolved by one month’s worth of data. The notion of “inflation persistence” is a slow-moving story. These are fundamental differences of opinion on the mechanics of inflation in the UK post-pandemic. More data is needed. So, having turned more cautious on rate cuts this summer, we don’t think the Bank’s thinking will have shifted as significantly as market pricing has over the past month. That’s why we recently removed a November rate cut from our forecasts – and we’ve not changed our mind since. A hold looks most likely this time.

A December cut is becoming more likely. The budget will probably reinforce the fiscal tightening already planned for next year, while the Treasury is very aware it can’t do anything that could add to inflation in 2026. While we doubt this will be enough to prompt a decisive rethink on the Bank’s rate cut strategy overall, it looks increasingly likely to tip the balance towards a pre-Christmas cut. That’s now narrowly our base case, and we expect two further cuts next year.