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Bank of England Set for Knife-Edge Rates Call With Hold Expected at 4%

Cooling inflation alongside budget uncertainty makes today’s call unusually close.

Overview

  • Most economists expect the MPC to keep Bank Rate at 4.0% in a narrowly divided vote.
  • Markets now assign roughly a one‑in‑three chance of a 25bp cut to 3.75%, with Goldman Sachs and Barclays forecasting an immediate reduction.
  • Headline inflation held at 3.8% in September as wage growth cooled and unemployment rose, strengthening the case for easing according to some analysts.
  • The November 26 Budget, with broad tax increases expected, is a key uncertainty and has led investors to price a higher likelihood of a December cut.
  • Today’s announcement will introduce summaries of individual MPC members’ views and place less emphasis on a single central inflation forecast.