18.12.202508:00:59UTC+00BoE to Resume Rate Cuts

The Bank of England is anticipated to reduce the Bank Rate by 25 basis points to 3.75% during its scheduled meeting in December 2025. This marks the first rate cut since August, following a period of holding rates steady in both September and November. This adjustment would result in borrowing costs reaching their lowest point since 2022, as inflation shows signs of easing and economic pressures become more evident. The UK's annual inflation rate slowed to 3.2% in November, which is not only the lowest in eight months but also falls below the Bank's forecast of 3.4%. Concurrently, GDP has experienced contraction for the second straight month as of October, and growth in private sector wages has also started to decelerate. Investors are expected to pay close attention to the voting split and the guidance provided by the nine-member Monetary Policy Committee, seeking insights into the policy direction for 2026. The market sentiment increasingly suggests that the central bank might be approaching the end of its current easing cycle, with only one further rate cut anticipated by investors for the following year.