(qlmbusinessnews.com . Sat 8th Nov, 2025) London, UK —
Anticipation Builds as Bank of England Considers Interest Rate Freeze Before Chancellor's Budget
Bank of England Poised to Maintain Interest Rates Steady at 4% Ahead of Chancellor's Budget
In the lead-up to the Chancellor's Budget announcement, it is broadly anticipated that the Bank of England's Monetary Policy Committee (MPC) will opt to keep interest rates unchanged at 4% at their concluding session before the financial unveiling.
Despite the recent inflation figures prompting some speculation about the potential for a reduction, the consensus among financial analysts leans towards the likelihood of such action being deferred until December.
Andrew Bailey, Governor of the Bank of England, admitted in September that while further reductions in the rate were foreseen, the trajectory would be marked by increased uncertainty.
The central bank's base rate directly influences both the borrowing costs for individuals and businesses alike, as well as the yield on savings.
Amid Deliberations Over Future Rate Cuts
Analysts are gearing up for the Bank's pronouncement at 12:00 GMT, with the majority expecting a steadfast position on the current rate.
Following a pattern of quarterly reductions of 0.25 percentage points since August of the previous year, the prevailing sentiment is that the Bank of England might halt this steady course of cuts this quarter.
The MPC members will be meticulously considering a raft of economic indicators, including inflation rates and the labour market, before finalizing their decision on the interest rates.
The inflation rate recorded in September stood at 3.8%, substantially exceeding the Bank's 2% aim yet falling short of projections. Notably, the rate of increase in food and beverage prices has slowed to its lowest in over a year, offering some relief to household incomes.
This moderation in price hikes has led some financial institutions such as Barclays and Goldman Sachs to anticipate a lowering of interest rates to 3.75% at this month's meeting, anticipating a divided opinion within the nine-member committee. This will be the first occurrence where the individual stances of MPC members will be disclosed alongside the collective decision.
AJ Bell's head of financial analysis, Danni Hewson, mentioned that the likelihood of a rate reduction to 3.75% is perceived as one in three, stating, “The odds are still decidedly in favour of maintaining the current rate.”
Awaiting the Chancellor's Budget Reveal
The forthcoming Budget, set to be presented by Chancellor Rachel Reeves on 26 November, is on the radar of the MPC members due to its potential to influence the case for a rate cut in December. Should the Budget incorporate significant tax hikes without fuelling inflation, it could pave the way for a reduction in interest rates.
In a recent address, the Chancellor outlined that the Budget's initiatives would prioritize curbing inflation and setting the stage for future rate cuts. However, detailed insights remain scarce until the fiscal plan is officially disclosed, with additional economic data expected before the Bank's subsequent meeting in December, which may affect the MPC's resolution.
Danni Hewson of AJ Bell suggested, “Rachel Reeves' unexpected press briefing on Tuesday might have been a tacit nudge to the Bank of England, hinting that by committing to suppress inflation, they could afford to lower rates ahead of the Budget announcement.” She added, “The decision hangs in a delicate balance.”
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