Wells Fargo: The Bank of England is expected to maintain the pace of quarterly interest rate cuts until February 2026

On December 20th, Jin10 Data reported that the Bank of England stated that gradual rate cuts in the future are still appropriate, according to Governor Bailey. Our fundamental expectation for the bank remains that it will continue to lower interest rates at a pace of 25 basis points per quarter. It is expected to lower rates by 25 basis points in February, May, August, and November next year, with the final 25 basis point cut in February 2026. However, we also acknowledge that the division in the voting results and the increased weakness in the prospect of a rise have increased the possibility of the Bank of England shifting towards a more stable approach of rate cuts at every meeting in 2025. Although we do expect that the Bank of England still needs to make more progress in wage growth deceleration and anti-inflation efforts in order to regularly drop its interest rate policy.