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Bank of England seen holding Bank Rate at 3.75% through 2026

The baseline case is 3.75% through 2026, but Societe Generale says energy-conflict escalation and renewed price spikes could lead to as many as two 25bp hikes.

Reported · Written up by our desk · Central Banks

Societe Generale’s Sam Cartwright argues the Bank of England should maintain a wait-and-see approach, pointing to signs that UK services inflation has eased and that the labour market has loosened.

The bank’s baseline view is that Bank Rate remains at 3.75% through 2026 to help restrain underlying inflation, FXStreet notes.

However, Cartwright also warns that a further escalation of the US-Iran-related energy conflict, or renewed price spikes, could prompt up to two additional 25bp BoE rate increases.

In the FX market, FXStreet reports GBP/USD has pushed to a three-month peak above 1.3600, while EUR/USD has climbed to its highest level since early June above 1.1650, as a stronger or weaker US dollar reacts to US policy moves and broader yield trends.

Latest closeEUR/USD 1.122 ▼0.3%|GBP/USD 1.323 ▼0.3%

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