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BoE expected to hold while higher-for-longer risks delay

Societe Generale flags slowing mortgage approvals toward late-2023 lows and says the first BoE cut could slip beyond current expectations for 1Q27.

Reported · Written up by our desk · Central Banks

Societe Generale’s UK team says the Bank of England is likely to keep a wait-and-see approach even as it weighs incoming inflation and growth signals.

In its assessment, weakening housing demand is visible in mortgage approvals falling to late-2023 lows, while business lending remains firm and wage expectations show limited signs of second-round effects.

The bank also faces energy-driven inflation risk, leading Societe Generale to expect the MPC to maintain higher rates for longer.

That setup, according to the note, could delay the first rate cut that is currently projected for 1Q27.

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