Economists agree: BoE will hold rates through year-end – Reuters poll
The Bank of England (BoE) will keep interest rates unchanged for the rest of the year, according to a Reuters poll conducted between August 13 and 18.
According to a Reuters poll conducted between August 13 and 18, the majority of economists expect the Bank of England (BoE) to keep interest rates unchanged at 3.75% for the rest of the year. Out of 64 polled, 56 economists anticipate the BoE to maintain the rate through the end of 2026, up from 83% last month. Despite inflation staying above the 2% target, economists largely agree that the BoE can be patient as the impact of higher Oil prices remains modest.
A narrow majority of economists expect at least one rate cut by mid-2027, even with inflation forecast to stay above target until late next year. The Bank of England's focus is on achieving steady inflation of 2%, using base lending rates as a tool. When inflation exceeds the target, the BoE raises interest rates, which strengthens the Pound Sterling by making the UK more attractive for investors.
Conversely, if inflation falls below target, the BoE may lower rates, weakening the Pound Sterling. Quantitative Easing (QE) and Quantitative Tightening (QT) are additional monetary policy tools the BoE can employ when needed.
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