Central Banks Watch Bank of England Review

The Bank of England maintained the bank rate at 3.75% in a split 5-4 decision, but revised forecasts downward and adopted a dovish tone. UniCredit expects the first of four rate cuts for 2026 to occur at the next meeting on March 19.

Key Takeaways

• 1.The Bank of England held the bank rate at 3.75% in a narrow 5-4 vote, signaling a dovish shift.
• 2.Growth and inflation forecasts were revised lower, with inflation expected to hit the 2% target by April 2026.
• 3.UniCredit forecasts four 25bp rate cuts in 2026, starting on March 19, reaching a terminal rate of 2.75%.

Table of Contents

• A dovish hold
• Come back in March
• Knife-edge vote
• Downward revisions
• More balanced inflation risks
• Our view

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