A Reuters poll of 65 economists indicates that the Bank of England (BoE) is expected to maintain the Bank Rate at 3.75% during its June 18 meeting [1]. The survey reveals a division among economists regarding the central bank's next steps: 40% anticipate at least one interest rate hike before the end of the year, while six respondents foresee a rate cut [1].
Economists surveyed expect inflation to peak at 3.6% this year, moving closer to the BoE’s 2% target, and then decline to 2.6% by 2027 [1]. Economic growth projections have improved, with the UK economy now expected to expand by 1% in 2024—an upward revision from May’s forecast of 0.8%—and by 1.1% in 2025 [1].
The BoE’s monetary policy decisions have direct implications for the Pound Sterling. Higher interest rates are generally positive for the currency, as they attract global investors, while rate cuts or quantitative easing (QE) tend to weaken the Pound [1]. Conversely, quantitative tightening (QT) is typically supportive of Sterling [1].
No immediate market reaction or analyst commentary on asset prices was provided in the article. However, the split among economists highlights ongoing uncertainty about the BoE’s policy trajectory amid evolving inflation and growth dynamics [1].
CONCLUSION
The Bank of England is widely expected to keep rates unchanged at its upcoming meeting, but economists remain divided on whether the next move will be a hike or a cut. Improved growth forecasts and expectations for moderating inflation suggest a cautiously optimistic outlook, though policy uncertainty persists.