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Bank of England's MPG discusses potential Bank Rate increases

The Bank of England's Market Participants Group (MPG) discussed the September Monetary Policy Committee (MPC) decision, noting that market expectations suggest Bank Rate may need to be raised.

  • Market participants agreed that the macroeconomic outlook and MPC communications align with expectations for potential Bank Rate increases.
  • The MPG welcomed the multi-year plan for unwinding gilt purchases, citing increased transparency and predictability.
  • Discussions also covered global bond yield drivers and international developments, including geopolitical uncertainty and energy prices.

The Bank of England's Market Participants Group (MPG) met on 24 September 2026, where discussions focused on the September Monetary Policy Committee (MPC) decision and broader financial market conditions. Market participants concurred that the prevailing macroeconomic outlook, alongside the MPC's communications, was consistent with financial market expectations that Bank Rate may need to be raised. They observed that expectations for Bank Rate increases, along with risk premia, were evident in the market curve profile.

Attendees also positively viewed the announced multi-year plan for unwinding the stock of gilt purchases held for monetary policy purposes. They welcomed the increased transparency and predictability this plan provided.

Internationally, the group discussed developments in major advanced economies, focusing on how geopolitical uncertainty and the future path of energy prices have impacted different countries. They also considered the drivers of higher global bond yields, including the resilience of major economies to the energy shock and the impact of duration supply.

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