New poll shines a light on the path analysts say the central bank will take
Experts say the Bank of England will leave its key interest rate unchanged when it meets next week – and it could hold rates steady for another year, according to a new Reuters poll of economists.
All 70 economists surveyed said the central bank’s trendsetting rate would stay at 3.75% after next Thursday’s decision, and chances of rate cuts are fading rapidly thanks to growing concern about the inflation outlook.
The US-Iran war, which has reignited in recent weeks after a brief ceasefire, has pushed oil prices sharply higher in 2026 and sparked fears of a spillover into price growth elsewhere.
The UK’s headline inflation number fell to 2.6% in June, government data showed this week – but that could prove a short-lived fall, with oil prices jumping above $100 again after US president Donald Trump threatened massive attacks on Iranian infrastructure.
For now, rate hikes don’t seem to be on the table. Fifty-eight respondents to the Reuters poll believe the Bank of England will leave rates untouched for the next 12 months, with eight predicting a quarter-point hike and four expecting a 25-basis-point cut.
Speaking to Mortgage Introducer this week, mortgage professionals indicated they didn’t see the case for imminent rate cuts despite the latest drop in inflation.
Nouran Moustafa, executive financial and mortgage adviser at Roxton Wealth, suggested borrowers shouldn’t count on rate relief anytime soon – and pointed to a recent rate hike by “around 90%” of lenders in response to the latest escalation in the Middle East conflict.
Still, some Bank of England decisionmakers have sounded a cautious tone on rate increases despite inflation fears. Sarah Breeden, the central bank’s deputy governor, pointed to concerns around the strength of the economy as a reason to hold rates where they are.
“We have a softish economic outlook; we have slack in the labour market,” Breeden said earlier this month. “Those two things mean that that [Iran war] shock is less likely to become embedded and lead to inflationary dynamics that we might need to lean against.”
After a series of rate cuts in 2025, the Bank has left rates untouched so far this year, taking a wait-and-see approach amid conflicting signs on the inflation and economic outlooks.
Following its decision next Thursday (July 30), it’s set to deliver three further announcements on interest rates between now and the end of the year: on September 17, November 5, and December 17.
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
