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2025-12-18 16:27:25
[Bank of England Expected to Resume Rate Cuts, Potentially Reaching 3.75%] ⑴ Markets widely expect the Bank of England to cut its benchmark interest rate by 25 basis points to 3.75% at its December 2025 meeting, marking the first rate cut since August. ⑵ This move would bring borrowing costs to their lowest level since 2022, against a backdrop of easing inflation and increasing signs of economic pressure. ⑶ UK annual inflation slowed to 3.2% in November, an eight-month low and below the Bank of England's forecast of 3.4%. ⑷ Meanwhile, GDP contracted for the second consecutive month in October, and private sector wage growth continued to cool. ⑸ Investors will closely watch the voting divisions and policy guidance of the nine-member Monetary Policy Committee for signals on the policy outlook for 2026. ⑹ Markets increasingly believe the central bank is nearing the end of its easing cycle, and the market is currently only fully pricing in an additional rate cut next year.
