Hawkish tilt at the BoE, but rate cuts to keep on coming

18th December 2025

The Bank of England struck a slightly hawkish tone while cutting interest rates from 4.00% to 3.75% today. But with inflation set to fall further than the Bank expects, we still think a rate cut in February is possible and that rates will fall to 3.00% in 2026 rather than to the low of 3.50% currently priced into the market.

We’re hosting a 20-minute online briefing at 3pm GMT today on the latest central bank decisions and 2026 policy outlook. (Register here.)

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Hawkish tilt at the BoE, but rate cuts to keep on coming

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