BoE Set to Hold Rates, Slow QT Amid Easing Inflation

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

Haddad expects a 6-3 vote, with Megan Greene, Catherine L Mann, and Huw Pill potentially backing a 25bps hike.

The UK's easing wage growth and services inflation have given the BoE room to pause further rate hikes.

The BoE is set to slow down its quantitative tightening (QT) pace, reducing the gilt holdings rundown from £70bn to £50bn over October 2026 to September 2027.

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