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Morgan Stanley Postpones First Bank of England Expected Rate Cut to March 2026 Vs. February After Higher Inflation

BY MT Newswires | ECONOMIC | 01/22/26 07:10 AM EST

07:10 AM EST, 01/22/2026 (MT Newswires) -- The United Kingdom's inflation in December came in a bit above consensus forecasts, on stronger food prices, said Morgan Stanley.

Food inflation will start subsiding from January and the bank continues to expect inflation at target in April.

Morgan Stanley noted that is has tilted the next Bank of England rate cut from February into March. The bank then expects further rate reductions in July and November 2026 from April and June before, as the BoE responds to spot inflation and pay data.

Any "meaningful" change of direction in U.K. fiscal policy post-May would lead Morgan Stanley to re-evaluate this call, as well as any further shifts in the bank's global growth forecasts.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.

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