Bank of England Comment

Rabobank expects the Bank of England to keep interest rates on hold at 3.75% for the rest of 2026, citing falling energy prices and weakening underlying inflation pressures. The committee remains divided, but the economic conditions do not currently support further rate hikes.

Key Takeaways

• 1.The Bank of England held rates at 3.75%, and we have removed our call for a rate hike for the remainder of the year.
• 2.The sharp decline in energy prices has reduced the inflation outlook, softening the case for further monetary tightening.

Table of Contents

• Summary
• Scenario A-?
• Soft underlying inflation
• Ongoing division
• Outlook: no hikes?
• Disclaimer

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