Probability of BoE interest rate hikes may be starting to shrink

31st July 2026

Despite the Bank of England maintaining its hiking bias on Thursday, it feels as though the Bank is edging further away from interest rate hikes as it comes round to our view that the weak labour market is not conductive of meaningful second-round inflation effects. This lends some support to our forecast that the Bank will keep interest rates at 3.75% this year and reduce them to 3.00% in 2027.

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