The Bank of England is expected to hold its base rate this week, analysts believe, with cuts likely later in the year.

The Bank’s Monetary Policy Committee (MPC) will next meet on 5 February. The current base rate, of 3.75%, has been in force since December 2025.

Analysts believe the MPC will hold rates in February but cut later in the year.

Berenberg Bank economist Andrew Wishart said: “Although the incoming data do not justify an imminent further rate cut, we expect the story to change as the year progresses.”

“It will be difficult for spending and activity to maintain momentum.”

Pantheon Macroeconomics economist Rob Wood said: “We expect the MPC to reiterate its previous guidance that another Bank Rate cut is likely but the rate cycle is probably close to an end.”

Other investment experts also agree more cuts are coming, differing only on the timing of these predictions.

UBS believes the MPC will cut base rate in March, then June, bringing base rate down to 3.25%.

Morgan Stanley now thinks the MPC will trim base rate in March, scrapping its earlier prediction for a cut in February. The firm then expects further cuts in July and November.

Capital Economics and HSBC believe base rate will be cut to 3% this year.