Most economists are expecting that interest rates will be kept at 3.75% as the Bank’s Monetary Policy Committee (MPC) will want to prevent inflation rising further.
Economists are expecting the MPC will want to keep focused on economic growth.
On Thursday the MPC will meet for the first time in 2026 after lowering interest rates in December 2025.
In December the Bank’s governor Andrew Bailey said the UK has “passed the recent peak in inflation and it has continued to fall,” as result the MPC lowered rated for the fourth time last year.
Philip Shaw, an analyst for Investec, said, “The principal reason to hold off from easing again is that at 3.4% in December, inflation remains well above the 2% target.
“In itself this is not a huge issue, bearing in mind that this lies a touch below the Bank’s baseline projection in November of 3.5% and that its medium-term forecast is consistent with hitting the target.
“But with the stance of policy less restrictive than previously, there are greater risks that further easing is unwarranted.”
Matt Swannell, chief economic advisor to the EY ITEM Club, said, “Keeping bank rate unchanged at 3.75% at next week’s meeting looks a near-certainty.
“Some of the MPC doves that favoured a cut in December still harbour some concerns around sticky wage growth and inflation.
“Although the data over the last few weeks has tilted in a slightly dovish direction, this does not appear to be anywhere near enough to prompt a majority of the MPC to favour back-to-back cuts.”
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