Bank of England to Cut Interest Rates in December and Again in Q1 2026: Reuters Poll

• The Bank of England (BoE) will cut interest rates in December and again early next year as inflation cools over the coming months, according to a majority of economists in a Reuters poll who last month expected borrowing costs to remain unchanged for the remainder of this year.
• Next month's meeting will follow British Finance Minister Rachel Reeves' Autumn Budget on November 26, where she is no longer expected to raise income tax but will make up an expected shortfall through smaller tax rises from other sources.
• The Monetary Policy Committee voted 5-4 to leave rates unchanged earlier this month, with BoE Governor Andrew Bailey casting the deciding vote, wanting to wait for evidence of declining inflation before committing to a cut.
• Nearly 80.0% of economists, 48 of 61, expect the BoE will cut Bank Rate by 25 basis points to 3.75% on December 18, according to a Reuters poll taken November 13-18. The rest forecast no move. That compares with 54.0% who expected unchanged rates for the remainder of the year in an October survey. Around that proportion, expect a follow-up cut to 3.50% in Q1 2026.

(Source: Reuters)