BoE Likely Finished Cutting Rates in 2025, Say Top Brokerages

Top U.K. brokerages including Goldman Sachs, Citigroup, and J.P. Morgan now believe the Bank of England is unlikely to lower interest rates any further this year, following its decision to pause rate cuts in September. This pause comes after an August reduction of one quarter-point as the Bank contends with stubborn inflation and tepid growth.
Inflation in the U.K. reached about 3.8% in August, among the highest in developed economies. While several institutions, such as Goldman Sachs and J.P. Morgan, suggest that the next potential cut may occur in February 2026, they also concede that if incoming economic indicators weaken sharply, a rate cut in December 2025 could still be possible. Peel Hunt aligns with the view that no additional easing is expected before year-end.
Current market sentiment places roughly a 30% chance on any further reduction in rates this year. The Bank of England anticipates inflation to peak around 4% in September and to decline gradually toward its 2% target by mid-2027. Governor Andrew Bailey emphasized the importance of caution before taking further action. While Citigroup described the BoE’s approach as highly data-dependent, Barclays and BNP Paribas remain open to adjustments later in the year if indicators such as employment or growth significantly deteriorate.
The prevailing outlook suggests that the BoE has likely reached the end of its easing cycle for 2025—unless unexpected economic headwinds force a shift. Keywords such as “Bank of England rate cuts 2025,” “UK inflation outlook,” “BoE pause September,” and “when next UK rate cut” are central to understanding the current monetary policy environment.