MNI BOE Review: March 2026 - One Crisis After Another

For the full MNI BOE Review click here

• The MPC dropped its easing bias, unanimously supported an on hold decision, with even consistent dove Dhingra noting that hikes may potentially be appropriate ahead.
• The market has at points fully priced in 3x25bp hikes following the decision and if the situation in the Middle East doesn’t resolve quickly there is a chance that this happens. However, we don’t at this stage think hikes are as baked in as markets assume.
• We note that the four members who voted for a cut in February as well as Governor Bailey all remain concerned about the state of the economy and labour market (despite Dhingra’s warning of potential hikes).
• Our takeaway from the meeting is that the bar to hikes is lower than we had previously assumed, that the MPC is more concerned about passthrough to second round effects than we had thought but the main view is that the Committee don’t feel in a position to precommit to anything right now.
• We do, however, think that fiscal policy is becoming increasingly necessary to avoid a hike (and we aren't that optimistic it will come in time).
• We also summarise the views of over 20 sell side analsyts following the decision. Just over half (11/21) of the analyst reviews that we have read still look for the next move from the MPC to be a cut. 4/21 look for a hike while 6/21 look for the Bank to remain on hold for their forecast horizon.