UK interest rates: is a surprise cut on the cards? | Metals Mine

  • UK interest rates: is a surprise cut on the cards?

    From moneyweek.com

    There are various factors at play in the MPC’s decision tomorrow. As we’ve seen, inflation might be about to fall – but it hasn’t yet. The economy is plugging away, but is far from thriving. “We think a majority of committee members will want to see much clearer evidence of downside surprises in the data being sustained and the Agents' findings on next year's pay deals before voting to cut Bank Rate again,” said Edward Allenby, senior economist at Oxford Economics. Allenby highlights that the MPC will be much better-informed by the time of its December meeting. There will have been two further inflation ... (full story)

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ZforexCM
Nov 6, 2025 1:19am
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The British pound traded near 1.3060 as markets positioned ahead of tomorrow’s Bank of England meeting. The MPC is widely expected to keep rates at 4%, reflecting caution given that inflation is still above target and growth is only modest.

Recent softer inflation and slower activity have increased speculation of a 25 bps cut, but policymakers appear likely to wait for clearer data. A potential December move is seen as more likely, as by then the BoE will have:

• Two additional inflation reports
• Updated labor market data
• Fiscal clarity following the Autumn Budget

The BoE projects inflation to ease gradually through 2026 and return to 2% in early 2027, suggesting rate cuts are possible but not imminent.

The pound’s recent recovery is mainly technical, supported by a slight pullback in the US dollar. Direction now depends on Governor Bailey’s tone at the press conference.

Technical levels:
Support: 1.3010, 1.2930
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