Bank of England's Monetary Policy Committee maintains the United Kingdom's interest rates at the current level
The Bank of England's Monetary Policy Committee (MPC) is set to announce its decision on interest rates tomorrow (18 September) at midday. The consensus among most experts is that it is highly unlikely that the MPC will vote to cut interest rates, with the current rate standing at 4%.
However, some economists have differing opinions. Deutsche Bank expects three more UK interest rate cuts before 2027, and Sanjay Raja, their chief UK economist, suggests that the MPC's forward guidance could change after the MPC meeting.
Ed Monk, pensions and investment specialist at Fidelity International, argues that there may be no further cuts this year and just one through the whole of 2026. On the other hand, Michael Saunders, a former MPC rate-setter, believes that the next rate cut will most likely come in early 2026.
Rob Morgan, chief investment analyst at Charles Stanley, believes that December's meeting could be more finely balanced for a rate cut. James Smith, UK developed markets economist at ING, thinks that a rate cut at the next meeting (on 6 November) is still on the table.
Inflation, as measured by the Consumer Prices Index (CPI), is still running at close to double the Bank of England's 2% target. The Bank of England's CPI for August was 3.8%, unchanged from the previous reading for July. The average mortgage rate has fallen by 0.44% over the past year, despite base rate having fallen 1% during that time. The Moneyfacts Average Savings Rate is currently at 3.46%, down 0.34% year-on-year.
The MPC has reaffirmed its commitment to a 'gradual and careful approach' to easing monetary policy. If two members vote for a rate cut as predicted, they are likely to be Swati Dhingra and Alan Taylor, who voted for a 25 basis point cut from 4.0% to 3.75% in the last meeting. The MPC members most likely to signal a sanction via UK money market rates are Dhingra and Taylor.
The timing of the Autumn Budget, scheduled for 26 November, could tie the Bank of England's hands at its next MPC meeting. The Federal Reserve (Fed) has already cut US interest rates by 25 basis points to 4.00-4.25%.
Stay tuned for the MPC's decision tomorrow at midday.
Read also:
- The Cost of Speech is Zero, True Strength Lies in Unity
- Beginning a Food Truck Venture: Crucial Stages to Achieve Profitability
- Aiming to simplify the move towards cleaner automobiles, the newly established ministry plans to take direct action with Pannier-Runacher, Létard, and Vautrin at the helm.
- "The imperfect yet essential documentary, "Planet of the Humans," raises challenging and uncomfortable inquiries"
