Bank of England seen holding 3.75% rate through mid-2027

  • Bank of England economists expect the MPC to keep Bank Rate at 3.75% through mid-2027.
  • 57 of 65 economists forecast unchanged rates through year-end; eight predict 4.00%.
  • Three of nine MPC members backed a July rate rise, up from two previously.

The Bank of England is expected to keep Bank Rate at 3.75% through the end of this year and at least mid-2027, according to a Reuters poll of 65 economists conducted Sept. 4-8. All respondents forecast no change at the Monetary Policy Committee's Sept. 17 meeting, while 57 expect rates to remain unchanged through year-end and eight predict a rise to 4.00%. Economists say higher energy prices linked to the ongoing U.S.-Israeli war on Iran could delay any rate cut until late next year, although there is so far no evidence that increased energy costs are feeding into broader inflation. Financial markets are pricing three rate hikes through mid-2027, beginning in November. Inflation was last reported at 2.9% and is expected to peak later this year, but economists say there are not yet signs of second-round effects that would prompt a majority of policymakers to support higher borrowing costs. The median forecast puts the next MPC move at a quarter-point cut in the third quarter of 2027, later than in the August poll. The survey sees inflation averaging 3.1% this year, 2.5% in 2027 and 1.9% in 2028, while economic growth is forecast at 1.1% in 2026, 1.2% in 2027 and 1.5% in 2028.

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