MNI BoE Review - August 2025: November Cut Not a Done Deal

For the full publication including a detailed debrief on the August MPR and summaries of sell side views click here.

• Despite the expected 25bp cut to 4.00%, the vote split was more hawkish than expected with four members preferring to maintain Bank Rate on hold.
• The MNI Markets team sees a very high bar to any of these four dissenters favouring a November cut.
• A September cut looks extremely unlikely and we assign a subjective 2/3 probability of a November 25bp cut with a cumulative 80% probability to a cut in either November or December.
• Governor Bailey seems to be the median voter in our view, but any comments from any comments from Breeden, Dhingra and Ramsden take on added significance in the near-term as all are likely to be needed to reach quorum for a November cut.
• If the near-term data show even a small overshoot for headline CPI or some stabilisation in the labour market, a December cut may start to look more likely than November. By December we will have seen the impact of the Budget as well as have more information on the impact of the peak of inflation on consumer inflation expectations and on pay settlements for 2026.
• Bailey is next due to speak at Jackson Hole while both Lombardelli and Bailey (and probably two others) are likely to testify ahead of the Treasury Select Committee in the first week of September.
• There was acknowledgement that there had been a steepening of the yield curve in the discussion on QT (albeit without QT having been seen as such a factor). We would continue to favour a 25/26 target reduction in the APF stock of GBP60-65bln (the median in the MaPS survey expects GBP72bln). The MPC will decide on this in September.