BoE Preview: Forecasts from eight major banks, another hold amid growing worries about a recession

Despite the data being less conclusive ahead of the November meeting than the universally negative prints seen in the run-up to the September decision, we expect the BoE to keep rates on hold at 5.25%. Rising international bond yields and geopolitical concerns (notwithstanding the potential impact on energy prices of the latter) also suggest against higher rates.  We think we’ve seen the last of the hiking cycle and expect the next move in rates to be down in Q3 next year. We look for 5x25 bps sequential cuts from August 2024 to take rates back down to 4% by February 2025. 

There have been virtually no signs of strength in the recent data, and as such, we look for a comfortable 8-1 vote in favour of a hold. Moreover, forward guidance will likely be softened a bit, in light of the weaker economic outlook – signaling a pretty high bar for further hikes. A dovish hold by the BoE will weigh on the GBP especially versus peers where the growth-inflation outcomes don't look as meek.

The BoE will most likely keep the key rate unchanged at 5.25%.

We expect no change in the Bank Rate (5.25%) or the Bank's forward guidance.

We expect the BoE to keep the Bank Rate unchanged at 5.25%. Overall, we expect the MPC to stick to its previous guidance emphasising the ‘higher for longer’ approach.

We expect the BoE to keep rates on hold for a second consecutive month. Inflation is still too high, but we expect more progress over coming months and that should enable some gradual rate cuts from summer next year.

Unlike last time, when the MPC surprised markets by remaining on hold, this meeting should be less eventful and we expect the Bank to stay on hold again, at 5.25%. Data since the previous meeting should have reinforced the MPC’s view that the rate hikes are weakening demand and the labour market, while a significant portion of the effects from the previous hikes is yet to come through.

We expect the BoE MPC to hold rates steady again at 5.25%, most likely by a 6-3 margin. However, the committee is likely to strike a hawkish tone, keeping asymmetric near-term guidance in place, and pushing back against even tentative inversion via the forecasts. At this stage, the committee has almost no incentive to be more dovish given upside risks around near-term inflation and the seasonality in wage setting. But the likely hawkish commentary notwithstanding, the empirical basis behind ‘Table Mountain’ – namely resilient demand and sticky inflation appear increasingly suspect.