BOE Interest-Rate Decision | Special Coverage

Summary

Bloomberg's special coverage of the Bank of England's rate decision, where the MPC held Bank Rate at 3.75% with a surprisingly dovish 5-4 split. Governor Andrew Bailey said disinflation is running ahead of schedule, that further easing is likely, and that the market curve implying two more cuts to around 3.25% is a reasonable profile, while flagging a loosening labor market. Sterling fell and short-dated gilt yields dropped, and the press conference also touched on gold, UK political risk, and the Fed chair nomination.

• The Bank of England held Bank Rate at 3.75% with a surprise 5-4 vote split; four members wanted an immediate cut to 3.50%.
• Governor Bailey said inflation is falling ahead of schedule and that bank rate is likely to be cut further, calling the market path to around 3.25% a reasonable profile.
• Markets reacted dovishly: the pound dropped and short-dated gilt yields fell, while the long end remains sensitive to fiscal and political risk.
• Panellists debated AI's impact on inflation and jobs, the loosening UK labor market, the high savings rate, and tax risk.
• Guest analysts flagged global crowding out from sovereign and tech debt issuance as pressure on long-end yields, and a possible Labour leadership change as a long-end gilt risk.
• The press conference also covered BoE gold custody and gold-market volatility, the Epstein-Mandelson affair, and Bailey welcoming Kevin Walsh's Fed chair nomination.