Holding The Line And Buying Time

The Bank of England held interest rates at 3.75% in a 7-2 vote, with Governor Bailey signaling a shift toward a more dovish, growth-focused policy stance. SEB expects rates to remain on hold for 2026, with three cuts anticipated in 2027.

Key Takeaways

• 1.The Bank of England voted 7-2 to keep the Bank Rate unchanged at 3.75%.
• 2.Governor Bailey signaled a more dovish stance, prioritizing output stabilization over rapid inflation return.
• 3.SEB maintains its forecast for rates to hold for the remainder of 2026, followed by three cuts in 2027.

Table of Contents

• Holding the line and buying time
• Bank Rate on hold
• Bailey turns more dovish
• The BoE's game plan
• Our view: on hold, cuts in 2027

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