The Bank of England meeting next Thursday is widely expected to see interest rates cut by a quarter of a point to 4.25%, but economists are hotly debating whether or not the monetary policy committee will signal a faster pace of easing.
The MPC is likely to make a 25 basis points cut on 8 May and two further cuts later in the year as policymakers assess the global fallout from new US tariffs, was the call from UBS economist Anna Titareva.
She thinks the committee is likely to retain its “gradual and careful” messaging, but warned that if growth slows more sharply than expected, the Bank could shift to cutting rates at every meeting rather than quarterly.
Barclays' Jack Meaning also expects a cut, with a 8-1 vote in favour, predicting Swati Dhingra will vote for a larger 50bps cut to 4%.
Projections for both GDP growth and inflation will also be published by the Bank on Thursday, with the Barclays economist expecting inflation forecasts to be revised down, "signalling that the balance of risks has shifted to a less inflationary outlook.
"We think this will open the door to a June cut without explicitly referencing it, to retain optionality."
While services inflation has remained sticky, a dovish shift in tone from typically hawkish MPC member Megan Greene – who framed tariffs as disinflationary – suggests there could be wider support for easing, added Titareva.
She expects the Bank Rate to end the year at 3.75%, with three more cuts in 2026 to take rates to a 'terminal' level of 3.0%.
Dani Stoilova, economist at BNP Paribas Markets, also thinks an 8-1 vote is most likely, along with guidance for a gradual approach unchanged, though elevated uncertainty homne and abroad will "lead the MPC to stress there is no pre-set path for policy, in our view".
"Given the current backdrop, we think this would imply optionality to accelerate the pace of rate cuts."
BNP's Stoilova sees quarterly 25bps cuts ending with a terminal Bank rate of 3.50% in the first quarter of 2026, but she sees "growing risks of an acceleration as early as next month".
The next BoE meeting after this is on 19 June.