As expected, the Bank of England’s (BOE) decided to maintain the Bank Rate at 5.25% on 2 Nov, but said monetary policy will likely need to stay tight for an “extended period of time”. There were little changes to the accompanying Monetary Policy Summary and Minutes, which saw slight tweaks. There were also little surprises in the updated projections set out in the accompanying Nov Monetary Policy Report, where it lowered GDP growth forecasts and raised CPI forecasts across the outlook horizon.   

Our view remains data dependent like the BOE, keeping the view that all options are on the table. Barring any huge upside surprises to services inflation or wage data, our base case remains for the Bank Rate to stay at its peak of 5.25% for now, following 515 bps of tightening since Dec 2021.  

The next monetary policy meeting is on 14 Dec. Before that, focus will be on the Autumn Statement on 22 Nov, presented by Chancellor of the Exchequer Jeremy Hunt to Parliament, alongside updated projections by the Office for Budget Responsibility. Any policy announcements then could have an impact on growth.