Bank of England Expected to Pause Further Cuts in 2025

The Bank of England is unlikely to deliver additional rate cuts this year, according to several major investment banks. Institutions including Goldman Sachs, J.P. Morgan, and Citigroup now expect policymakers to hold rates steady for the rest of 2025, following September’s decision to pause after an initial round of easing.

The shift in outlook comes as the central bank balances two competing pressures: persistent inflation and weak economic momentum. While borrowing costs have already been trimmed to support households and businesses, consumer prices remain elevated enough to limit further accommodation in the near term.

Analysts note that policymakers are treading carefully to avoid fueling inflationary pressures while still providing support to the economy. With growth indicators pointing to sluggish demand and fragile business sentiment, the BoE faces a difficult policy path into year-end.

For investors, the expectation of a rate plateau means attention will turn to the timing of any future policy shifts in 2026, as well as the impact of the current stance on sterling, bond yields, and U.K. equities.