Bank of England policy-setters were due at midday to leave interest rates unchanged, with the market focused on whether the decision comes with a sharper warning about the UK outlook. Borrowers would feel the main effect in mortgage pricing, while investors are looking for any signal that future rate rises are still on the table.
Suren Thiru said, "An interest rate hold at midday looks a near certainty, as the recent run of more dovish economic data should give rate-setters enough comfort to look through the twists and turns of the US-Iran conflict for now." He also said the monetary policy committee’s vote split was likely to remain 7–2 in favour of holding rates steady.
Andrew Wishart said, "We expect the Bank of England (BoE) to leave its Bank Rate unchanged at 3.75% tomorrow, but threaten to raise interest rates if energy prices rise a lot more or evidence of second-round effects surfaces." That puts the emphasis on the forecast path, not just the decision itself, because a hold would still leave room for a later move if inflation pressure broadens beyond energy.
BoE Forecasts Under Pressure
The Bank of England was also publishing new economic forecasts in its monetary policy report, with Andrew Bailey preparing to present updated forecasts on the UK economy later that afternoon. Elevated oil prices were expected to reinforce a hawkish stance, which is why traders had revised up their interest-rate expectations and mortgage borrowing costs when the Iran conflict flared up.
On 19 March, the market had priced in two 25pb hikes to 4.25% by this week’s meeting after the March BoE decision, a reminder of how quickly the path for Bank Rate can shift when energy costs move. If the forecasts stay firm while the vote split holds at 7–2, the message to borrowers is that today’s pause does not rule out a tighter stance later.
Andrew Bailey and 7–2 Vote Split
A 7–2 vote would show that most monetary policy committee members still prefer to wait, but the two dissenters would keep the case for higher rates alive inside the room. For households and businesses tracking borrowing costs, the detail to watch is whether Bailey’s forecast update softens that risk or leaves it open.
By midday, the market was looking for a hold; later in the afternoon, Bailey was set to explain the numbers that sit behind it. The open question is whether the new forecasts make 3.75% look like a pause or a stop.
