BoE Rate Freeze Set for Mid-2027 Amid Rising Energy Costs

The Bank of England's base rate is expected to remain at 3.75% until mid-2027, according to economists surveyed by Reuters. The median forecast suggests that all 65 respondents expect the Monetary Policy Committee to leave the rate unchanged at its September 17 meeting.

Of the 65 economists polled, 57, or nearly 90%, believe the rate will remain the same until the end of the year. Eight others think it will rise to 4% by that time. The recent surge in energy prices, amid tensions between the US and Iran, may have delayed prospects for a rate cut until late next year.

Goldman Sachs senior economist James Moberly predicts inflation could peak at 3.3% in November. However, this is unlikely to trigger concerns about second-round inflation effects. The latest inflation reading stood at 2.9%, below the Bank of England's 2% target.

The median forecast suggests that the Bank of England's next move will be a 0.25-percentage-point rate cut in the third quarter of 2027, later than expected by previous respondents. Meanwhile, financial markets are pricing in three rate hikes by mid-2027, with the first anticipated in November.