ABN AMRO has observed a shift in the Bank of England's (BoE) Monetary Policy Committee (MPC) tone, describing it as more dovish compared to the hawkish stance communicated in March. Despite this change, ABN AMRO still anticipates that the BoE will implement an 'insurance' rate hike over the summer, though the conviction behind this expectation has diminished. The bank notes that this potential hike would be followed by a return to a wait-and-see approach, contingent on the normalization of energy supplies in the third quarter of the year [1].
The analysis highlights that current policy rates are already considered restrictive, and the MPC's bias, while historically volatile, is ultimately dovish. ABN AMRO projects that rate cuts will not resume until late 2026, indicating a prolonged period of elevated rates before any easing occurs [1].
No immediate market reactions or analyst opinions beyond ABN AMRO's outlook are discussed in the article. There are also no specific figures, percentages, or named entities mentioned regarding the magnitude of the expected rate hike or the current policy rate [1].
CONCLUSION
ABN AMRO forecasts one more Bank of England rate hike over the summer, followed by a prolonged pause and eventual rate cuts starting in late 2026. The MPC's shift to a more dovish tone suggests a cautious approach as energy supplies normalize, with policy remaining restrictive in the interim.