The Bank of England is widely expected to trim interest rates by 25 basis points today, but the real story may lie in how the policymakers vote.
At June’s meeting, the Monetary Policy Committee (MPC) kept the Bank Rate steady at 4.25%, despite three members, Dhingra, Taylor, and Ramsden, pushing for a cut.
The final vote stood at 6-3. Fast forward to today, and markets are pricing in a 93% chance of a 25 bps cut. But beyond the expected move, all eyes are on the voting split, and it’s anything but clear-cut.
The range of predictions from analysts is unusually wide. Some foresee a sharp divergence in views, suggesting outcomes anywhere between:
- 2-4-3 (supporting 50 bps – 25 bps – no cut)
- 0-9-0 (a unanimous 25 bps cut)
- 2-7-0 and 0-6-3 are also on the cards
Such a spread has rarely been seen ahead of a BOE decision. One analyst noted, “I don’t recall a time where we had such a variance in terms of the bank rate vote split, at least in terms of expectations.”
Supporters of a bolder 50 bps cut are expected to be Dhingra and Taylor, who’ve consistently leaned dovish. Ramsden, though a dissenter last time, is seen more as an advocate for faster cuts rather than larger ones.
On the flip side, hawkish members like Mann, Pill, and Greene could vote to hold rates. Their focus remains squarely on inflation risk, and they may not be quite ready to budge.
Despite today’s cut being largely priced in, it’s the BOE’s messaging and internal vote split that could sway market expectations for the rest of the year.
A deeper-than-expected divide among policymakers might signal that the path ahead is anything but smooth, and could shift forecasts for the next rate move into November or even December.
Markets are pencilling in one more reduction before year-end. Whether that comes in November or December hinges heavily on upcoming data. Economic signals in the next few months will determine the pace, and possibly the scale, of further easing.
Expect the BOE to stay cautious in its communication. Phrases like “gradual” and “careful” will likely remain.
But analysts will be closely watching if the term “restrictive” stays in the forward guidance. Most believe it will, though JP Morgan has hinted the BOE might adopt a slightly more dovish tone.
Analyst Projections at a Glance
| Institution | Expected Vote Split | Forecast Terminal Rate |
|---|---|---|
| Barclays | 2-5-2 (risk of 3-4-2) | 3.50% (Feb 2026) |
| JP Morgan | 2-5-2 | 3.50% (Q1 2026) |
| HSBC | 2-4-3 (risk of 3-3-3) | Hawkish risk, next cut Nov |
| BNP Paribas | 2-7-0 | 3.50% (Q1 2026) |
| Goldman Sachs | 1-6-2 | 3.00% (Mar 2026) |
| Deutsche Bank | 2-5-2 | 3.25% (early 2026) |
| ING | 1-7-1 | 3.25% (Q2 2026) |
| Nomura | 2-5-2 | 3.50% (Feb 2026) |
Whatever happens today, it’s not just about the rate cut. The tone, language, and vote split will be key in guiding markets. While the BOE is expected to stay on its easing path, how united – or divided – the committee appears may determine the tempo of monetary policy heading into 2026.
Stay tuned. The decision could offer more than just a rate move.
