Major brokerages including Goldman Sachs, Morgan Stanley, UBS, and BofA now expect the Bank of England (BoE) to hold off on further rate cuts this year, following the central bank’s decision on Thursday to pause after its quarter-point reduction in August.
The BoE is treading carefully as UK inflation remains stubborn at 3.8%, the highest among major advanced economies, and growth prospects remain uncertain, News.Az reports, citing Reuters.
Governor Andrew Bailey warned that while inflation is expected to peak at 4% this month before easing toward the 2% target by mid-2027, any further easing must be “gradual and carefully considered.”
Goldman Sachs, Morgan Stanley, and BofA: See the next cut coming in February 2026, followed by gradual quarterly reductions.
UBS: Also expects no more cuts this year.
Barclays: Remains an outlier, predicting a possible November 2025 cut if incoming data weakens.
BNP Paribas: Sees a cut in December 2025, giving the BoE a buffer against uncertainty.
Markets currently price in just 7.5 basis points of easing by year-end, equating to a roughly 28% chance of another cut in 2025, according to LSEG data.
Citigroup analysts noted that the BoE’s “reactive approach” leaves room for short-term shifts, but consensus now points toward a longer wait before a sustained easing cycle begins.
