BOE Seen Holding Rates as Energy Price Shock Fades

Bank of America (BofA) analysts predict that the Bank of England will hold interest rates at 3.75% during its upcoming meeting next week.

The central bank is expected to slow down quantitative tightening, reducing it to £50 billion starting in October 2026 from the current pace of £70 billion.

A vote split of 6-3 is anticipated, with Pill, Greene, and Mann voting for a rate increase. There's also a small possibility that Lombardelli may join them.

Energy prices have risen, but BofA notes that there's limited evidence of second-round effects or pass-through to core inflation and wage growth.