Dovish BoE Keeps First Quarter Cut in Play While ECB Sticks to Neutrality

On February 5, 2026, the BoE and ECB both held interest rates steady, but the BoE adopted a dovish stance through a narrow 5-4 vote split and lowered inflation forecasts. Scotiabank expects a BoE cut in March while the ECB is projected to remain on hold at 2.00% through 2027.

Key Takeaways

• 1.The Bank of England held rates at 3.75% but delivered a dovish 5–4 vote split, signaling a likely 25bps cut in March 2026.
• 2.The European Central Bank maintained its Deposit Facility Rate at 2.00%, emphasizing data-dependence and a neutral bias.
• 3.BoE staff significantly lowered inflation and GDP growth projections for 2026, expecting inflation to hit the 2% target three quarters sooner than previously estimated.

Table of Contents

• BOE SURPRISES DOVISHLY IN VOTE SPLIT, FORECASTS, AND MPC VIEWS
• ECB STICKS TO DATA-DEPENDENCE, WITH NO BIAS

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