BoE Seen Sticking with Rates Unchanged as Inflation Bites

The Bank of England is expected to maintain its benchmark interest rate at 3.75% when it meets this week, according to UBS analysts.

Market expectations align with this view, pricing in a minimal 2.5 basis point increase.

UBS forecasts the vote split will remain at 7-2, matching the previous meeting, with Megan Greene and Huw Pill expected to vote for a 25 basis point rate hike.

Catherine Mann may join them in supporting a hike following her recent speech emphasizing upside risks to inflation, though UBS considers this less likely given recent softer inflation data.