Reuters survey: economists expect Bank of England to keep policy rate at 3.75% this year; 25 foresee at least one 25bp hike, six foresee one cut

A recent Reuters survey of economists indicates that the Bank of England is expected to maintain its policy rate at 3.75% throughout 2026, with most analysts anticipating no changes in the near term. Among the respondents, 25% foresee at least one 25 basis point (bp) rate hike, while six percent expect a rate cut before the year’s end. This outlook reflects ongoing uncertainty about inflationary pressures and the broader economic environment.

The Bank of England has held the base rate at 3.75% since December 2025, following a series of reductions earlier in the year. The Monetary Policy Committee (MPC) has emphasized its commitment to returning inflation to the 2% target, but recent developments, including rising energy prices due to the war in the Middle East, have complicated this goal. Inflation currently stands at 3.3%, above the Bank’s target, and is expected to rise further in the short term.

The Reuters survey highlights a divided view among economists, with some anticipating a cautious path of rate increases if inflationary pressures persist, while others expect further easing if inflation moderates as projected. The Bank has also noted that global energy prices are beyond its control, and its focus remains on preventing inflation from becoming entrenched.

For households and businesses, the stability of the policy rate means that mortgage, loan, and savings rates are unlikely to see significant changes in the near future. However, those with variable-rate mortgages may still face higher costs as fixed-rate deals expire. The next key decision by the Bank of England is scheduled for June 18, 2026, where policymakers will reassess the outlook based on the latest economic data.