UK BoE Holds Rate at 3.75% pct; 3-Months-Downbeat Outlook Ups 3-Quarter Rate-Cut Odds

The U.S. Federal Reserve equivalent, the Bank of England (BoE), held its policy rate at 3.75% pct on February 5, 2026, with a 5-4 vote split. Officials signaled a more dovish stance and suggested further easing is likely if inflation continues to trend toward its 2% target, though no specific timing was announced. The Governor, Andrew Bailey, stated that with inflation expected to回落并 remain near target, “there should be further scope to lower interest rates this year.” Markets quickly priced in over 50% chance of a rate cut in March, with a cumulative easing of about 45 bps by year-end implied. The MPC revised key outlooks lower: 2026 growth to 0.9% vs. 1.2% previously; unemployment expected to rise to 5.3% in Q2H226; and inflation forecast to hit 2% in April, likely staying below target for some time. The easing is attributed to falling energy prices and adjustments to household energy bills, with labor market slack increasing and wage growth moderating to about 3.25% pct.