UK: Interest rate meeting
Date: Thursday, 7 August at 9:00 pm (AEST)
At its June meeting, the BoE’s Monetary Policy Committee (MPC) voted 6–3 to hold the bank rate at 4.25%, with Dhingra, Ramsden, and Taylor dissenting for a 0.25 percentage point (pp) cut to 4%.
The MPC retained its ‘careful and gradual’ easing guidance, with minutes noting dovish signals from weak underlying UK GDP growth, increasing labour market slack, and moderating pay growth, though the majority viewed inflation risks as balanced.
Since the June meeting, core UK inflation rose to 3.7% in June, driven by persistent wage inflation and higher labour costs, while the unemployment rate climbed to 4.7%, the highest in nearly four years. Meanwhile, GDP growth contracted by 0.1% MoM in May following a 0.3% MoM fall in April, sparking fears of contraction when Q2 numbers are released in mid-August.
Markets are pricing an 82% probability of a 0.25 pp rate cut at the BoE’s August meeting, with expectations for another cut in December, potentially lowering the bank rate to 3.75% by year-end.
BoE official bank rate chart