Overview
- Bank Rate stands at 3.75% after December’s cut, and the Bank of England says headline inflation should move closer to 2% in April helped by Budget measures.
- UK inflation is about 3.2%, which remains above the 2% target.
- Deutsche Bank projects two cuts in March and June to 3.25%, while Oxford Economics also sees two moves this year with rates ending at 3.25%, and money markets broadly price around two cuts.
- End‑2026 inflation forecasts vary, with some expecting roughly 2.1% and others closer to 2.9%, highlighting uncertainty over the disinflation path.
- Lombard Odier’s Bill Papadakis issues an outlier forecast for Bank Rate at 2.75% by the end of summer, citing a weaker jobs market and softer services inflation that could prompt faster easing.