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2026-02-17 16:00:04
[Bank of England Rate Cut Probability Surges to 73%, Market "Fully Priced" for Easing Cycle?] ⑴ Following the release of UK labor market data, market expectations for a Bank of England rate cut have significantly increased. Interest rate futures show that traders now believe there is a 73% probability of a 25 basis point rate cut at the March policy meeting, far higher than the approximately 65% level before the data release. ⑵ Market expectations for a longer policy path have also become clearer. The latest interest rate futures pricing shows that by the end of 2026, the market has fully priced in two 25 basis point rate cuts by the Bank of England. ⑶ This sharp change in expectations is mainly due to previously released employment and wage data. Slower wage growth coupled with rising unemployment has reinforced the market's judgment that a slowdown in the UK economy will force the central bank to initiate an easing cycle sooner. The market focus will now shift to inflation and service sector data to validate the rationale behind this expectation.
