The Bank of England should hold interest rates at 3.75% on Thursday, according to City AM’s Shadow Monetary Policy Committee. The group of economists believes that recent economic data indicates the threat of spiralling inflation has eased, providing rate-setters with more flexibility.
Figures from the Office for National Statistics showed that inflation fell to 2.6% in the year to June. Additionally, job vacancies decreased, and GDP expanded by 0.1% in May 2026, which may reflect tamed demand.
Despite this, markets have priced in at least two interest rate hikes in the medium term. While most Shadow MPC members advocated for a hold, Professor Jagjit Chadha was the sole member to favour a 25 basis point increase, citing the country's difficulty in consistently meeting the two per cent inflation target.