Preview: BoE Pauses Easing Cycle, as Neutral Rate Approaches and the MPC Remains Divided

In this paper, we discuss:

• The Bank of England’s expected decision to hold Bank Rate, with a February cut now unlikely;
• Persistent divisions within the MPC, as strong recent activity data clashes with easing inflation expectations;
• Inflation easing toward target in H1 2026, but wage growth and services inflation keeping policymakers cautious;
• An uncertain rate path beyond Q1, with markets pricing gradual easing later in 2026.

Download PDF: BOE Preview – February 2026