BofA: Bank of England to Cut Key Rate in December Meeting; Narrow Vote Expected

07:58 AM EST, 12/11/2025 (MT Newswires) -- BofA Global Research expects the Bank of England to lower its key rate by 25 basis points to 3.75% at its Dec. 18 monetary policy committee meeting, with a narrow 5-4 vote in favor of the cut. "The dovish November hold, encouraging inflation progress, softening labour market/growth and disinflationary measures in the Autumn Budget should support a cut in December, barring fairly significant upside surprises in inflation data next week," analysts said in a Wednesday preview note. "Uncertainty remains including one more inflation/labour market print next week before the December meeting. We expect headline inflation to fall from 3.6% to 3.5%, 10bps higher than BoE's forecast." Analysts also expect the UK central bank to maintain its "gradual and meeting-by-meeting" guidance regarding monetary policy to allow for further assessment of the inflation progress. "The gradual guidance and emphasis on caution as we potentially approach close to neutral is likely to be a pushback towards a back-to-back cut in February [2026]," the research firm added.