BoE Expected to Hold Rates Amid Easing Inflation and Slower QT

The Bank of England (BoE) is expected to keep its policy rate at 3.75% for the sixth consecutive meeting, according to Brown Brothers Harriman's (BBH) Elias Haddad.

Easing UK wage growth and services inflation have given the BoE room to pause raising interest rates, which could lead to a 6-3 vote in favor of keeping the rate steady.

The BoE is also poised to slow down quantitative tightening (QT), reducing the pace at which it shrinks its bond holdings from £70bn to £50bn over October 2026 to September 2027.

Haddad views the market's expectation of 125 bps of rate hikes in the next twelve months as excessive, leaving the Pound vulnerable to a dovish repricing of the rate path.