Overview
- Most economists and market pricing point to a 25 basis-point reduction to 3.75% in a likely 5–4 vote, which would set borrowing costs at a three-year low.
- Headline CPI eased to 3.6% in October and fresh November figures due hours before the decision are forecast near 3.5%, with pay growth and surveys also showing signs of cooling.
- Official data show the economy contracted 0.1% in the three months to October and labour market indicators have weakened, strengthening the case for easing.
- Investors expect only limited additional cuts in 2026, and some analysts say the Bank may soften or drop language about a gradual downward path to retain flexibility.
- Bank officials have indicated the autumn Budget could shave roughly 0.5 percentage points off headline inflation next year, and any cut would feed through fastest to borrowers on variable-rate mortgages.