Overview
- The MPC kept Bank Rate at 4.0% after a knife-edge 5-4 split, with four members voting to cut to 3.75%.
- Governor Andrew Bailey said rates are on a gradual downward path contingent on clearer disinflation after the Bank judged inflation has peaked.
- Updated projections keep CPI above 2% until around the second quarter of 2027 and lift the expected unemployment peak to just above 5% early next year.
- The Bank overhauled its communications by publishing summaries of individual MPC members’ views and reframing guidance toward data-dependent, gradual easing.
- Investors raised the odds of a December reduction to roughly 60% as officials assess the upcoming budget, with forecasts citing weaker demand and recent drags from tax uncertainty, softer US exports and the Jaguar Land Rover cyber-attack.