The Bank of England is expected to hold Bank Rate at 3.75% on Thursday in an 8-1 vote, with new forecasts set to show higher inflation and weaker growth as the MPC assesses the Iran war’s economic fallout.
The Bank of England is expected to hold Bank Rate at 3.75% on Thursday in an 8-1 vote, with new forecasts set to show higher inflation and weaker growth as the MPC assesses the Iran war’s economic fallout. Earlier: Bank of England rate decision may spring a split vote surprise, HSBC warns Summary: All 62 economists in a Reuters poll predicted the MPC will keep Bank Rate at 3.75%, with most expecting an 8-1 vote and Chief Economist Huw Pill the most likely dissenter in favour of an immediate hike The March meeting produced a unanimous 9-0 hold; any move toward dissent this week would signal a shift in the committee’s internal balance toward tightening Governor Andrew Bailey has publicly pushed back against market pricing of rate hikes in 2026, calling such bets premature given uncertainty over the war’s duration and economic impact Pill has separately warned against a “wait-and-see” approach, arguing the risk of second-round inflationary effects from energy and food prices justifies a more pre-emptive stance Thursday’s Monetary Policy Report will be the BoE’s first detailed post-war set of forecasts; economists expect the BoE to raise its inflation projection and cut its growth outlook NIESR revised UK growth down to 0.9% this year and 1.0% in 2027, from earlier forecasts of 1.4% and 1.3%, while projecting inflation will not return to the 2% target until 2028 BNP forecasts two rate hikes in 2026 as UK inflation potentially peaks near 4.5% early next year, up from 3.3% currently Britain’s heavy reliance on natural gas, G7-high gilt yields and political uncertainty around Prime Minister Keir Starmer’s government add additional vulnerability to the energy shock Bailey and senior BoE officials will hold a press conference at 1130 GMT, thirty minutes after the rates decision, minutes and new forecasts are released The Bank of England is expected to hold Bank Rate at 3.75% on Thursday, joining the Federal Reserve, which kept rates unchanged on Wednesday, and the…