As the Bank of England (BoE) prepares for its next meeting, expectations are leaning towards a 25 basis point (bp) rate cut. Here’s a quick rundown of what we anticipate:

• Rate Cut Coming: A 25bp reduction is widely expected, reflecting a shift in the Bank’s approach as the UK economy continues to adjust.
• 8-1 Vote: The decision is likely to be supported by the majority, with an 8-1 vote, indicating that most members of the MPC are on board with easing policy.
• Guidance Stays “Gradual”: The BoE is expected to continue with its “gradual” approach to monetary policy, signaling that future rate changes will be considered on a meeting-by-meeting basis.
• “Restrictive for Sufficiently Long”: The central bank will likely reinforce its commitment to keeping policy restrictive for as long as necessary to achieve its inflation goals.
• Forecast Adjustments: Inflation expectations will likely be nudged higher, while GDP growth forecasts could be revised downward, reflecting ongoing economic challenges.
• Bailey’s Non-committal Stance: BoE Governor Andrew Bailey may maintain a cautious tone during the press conference, avoiding firm commitments about future policy moves.
• Quarterly Cuts on the Horizon: While the rate cut will be delivered in February, expect the BoE to stick with a quarterly approach to monetary policy adjustments moving forward.