The Bank of England has kept interest rates steady at 4% with an MPC vote of 5-4, offering markets a moment of calm before the 26 November Budget. With inflation still at 3.8% and the labour market showing early signs of cooling, the Monetary Policy Committee has opted for continuity rather than change.
For asset and wealth managers, the decision reinforces the “slow and steady” approach to monetary easing, but expectations are building for a December cut. In the meantime, portfolio positioning, quality assets and resilience remain key watchwords as investors look for opportunities amid shifting sentiment.
Industry experts share their views on what today’s decision means for asset and wealth managers below:
William Marshall, Chief Investment Officer, HRIS – Hymans Robertson Investment Services, said:
“Just a few weeks ago, a hold of interest rates seemed a foregone conclusion – as inflation moved up, approaching 4%, double the BoE’s target. However, September’s inflation data, released in late October, showed inflation holding steady at 3.8%. This opened up the possibility that a cut could be on the cards.
“Today, we saw that the majority of MPC members judged that November was too early for another cut. With inflation still above target and a high-level of fiscal policy uncertainty, our view is that a hold seems sensible.
“Gilt investors’ attention will now be squarely focused on the upcoming Budget. This week’s statement from the Chancellor may have temporarily reassured gilt investors, even if it did little to ease public concerns of further tax hikes. Given the large amount of uncertainty surrounding the Budget this may have swayed some of the MPC members to vote for a hold now, giving them time to assess the impact of the Budget.”
Derrick Dunne, CEO of YOU Asset Management, said:
“This hold is highly instructive of the concern that now appears to be creeping up on MPC members around inflation. Until now, the Bank of England has more or less cut its base rate on a predictable three-month schedule. We have had five cuts in succession this way. Behind other central banks such as the ECB on eight, but predictable nonetheless.
“A decision to hold, then, is a significant signal that it is worried about how ingrained inflation might now be in the UK economy. With the Budget looming, it would appear, like the rest of the economy, the MPC is now in ‘wait and see’ mode on what happens on 26 November.
“In her press conference on Tuesday, Rachel Reeves was at pains to signal that inflation was her priority. This is good news and suggests we won’t see VAT hikes. But it was highly indicative that an income tax increase is now coming, as this is the most deflationary fiscal measure at her disposal. Reeves is concerned by inflation because a significant proportion of the Government’s debt is index linked. This puts considerable pressure on its measures to ensure they aren’t inflationary. That mistake was already made through last year’s employer NI hike.
“The BoE could take this then as a positive indicator that inflation should pass through – but as the hold suggests – it is no longer fully confident in this regard. For families looking at higher rates – of both interest and tax – it is essential to take stock of their financial positions. Knee-jerk reactions should be avoided. If in doubt, speaking to a financial planner for assistance, both in the short- and long-term, is critical.”
Zara Nokes, Global Market Analyst at J.P. Morgan Asset Management (JPMAM), said:
“The Bank of England (BoE) made the right call to leave rates unchanged today. While there has been some positive news on the inflation front in recent weeks, the bottom line is that headline inflation is running at 3.8% – almost twice the BoE’s target. What is more, household inflation expectations are trending higher, meaning there is a risk that we see further upward pressure on prices.
“On the growth side, the labour market is cooling, but other economic data such as retail sales and consumer confidence paint a more resilient picture of the UK economy. The balance of risks could shift next year if large near-term tax hikes are announced at the Autumn budget but until there is more meaningful progress on bringing inflation down, the Bank must exercise a high degree of caution in lowering rates.”
Jonathon Marchant, Fund Manager at Mattioli Woods, said:
“The Bank of England held interest rates at today’s meeting, which was broadly expected by the market. Though at the start of October, it appeared that interest rate cuts were off the table for the remainder of the year, a string of softer than expected data points led to a sharp fall in gilt yields, as investors warmed to the idea that the Monetary Policy Committee (MPC) would be forced to take action.
“Cutting interest rates ahead of the Autumn Budget, with a plethora of ideas on the table was always unlikely. However, it seems that tax rises are likely to form a key part of Rachel Reeves’ plans towards the end of the month and could put more downward pressure on inflation. This, combined with inflation and private sector pay numbers falling short of expectations in October, appeared to be on the minds of MPC members, with a 5-4 split highlighting the desire to loosen monetary policy. The split, combined with comments from the committee on inflation falling from here suggest that a cut in December is very much on the table.
“Overall, the decision by the Bank of England appears to show a degree of pragmatism, ahead of a watershed moment for the UK economy and the current government later this month.”
Ed Monk, Pensions and Investment Specialist, Fidelity International said:
“Though no cut to rates arrived today, it’s clear the consensus is shifting inside the Bank of England. Four MPC members voted for a cut and, just as significantly, minutes from the meeting suggest members believe inflation has now peaked. Ahead of the decision, money markets have been altering their expectations for rates downwards, with two more quarter-point cuts now expected by the spring of next year. One more cut is now expected over the next six months than was the case a few weeks ago.
“Inflation sticking below the Bank’s forecast of 4% has relieved some of the pressure on the MPC to keep rates higher and it should now feel more able to lower borrowing costs. That’s a boost to indebted households and the mortgage market but would also help the Government in its efforts to kickstart growth.
“For investors, cash rates still appear attractive with returns from savings accounts and cash funds still staying ahead of inflation. Cash and money market funds accounted for four of the top ten best-selling funds for Fidelity Personal Investing clients in October, indicating that many are happy to sit on the sidelines and milk risk-free returns from now.”
Jeff Brummette, Chief Investment Officer at independent investment manager Oakglen Wealth, said:
“As expected, the Bank of England left rates unchanged this month. While inflation was below expectations in September, the 3.8% reported was still well above target. The Bank’s Monetary Policy Committee will need to see a further softening in the labour market, or perhaps a restrictive budget from Chancellor Rachel Reeves later this month, to enable them to resume a programme of rate cutting.”
Richard Flax, Chief Investment Officer at Moneyfarm, said:
“The Bank of England’s decision to hold interest rates at 4.00% reflects a cautious and measured stance amid persistent economic headwinds. The decision was in line with investor expectations but the vote was split 5-4 highlighting the challenging environment for policymakers.
“While the MPC traditionally avoids acting ahead of fiscal policy announcements, the current environment leaves us navigating uncertain waters, making any decisive action challenging.”
John Wyn-Evans, Head of Market Analysis at Rathbones, said:
“The hold was widely expected. However, unlike the US Federal Reserve’s recent ‘hawkish cut’, today’s decision could be described as a ‘dovish hold’. The vote split was just 5-4 in favour of no change vs the 6-3 average view of economists polled by Bloomberg. There was also a subtle change in the policy wording, with the path of future rate cuts being described as ‘gradual’ rather than ‘careful’.
“Inflation risks are seen as more balanced than previously, helped by recent more favourable data. But Governor Andrew Bailey (who casts the deciding vote to hold) highlighted the need to see more data. Even so, more rate cuts are on the way, barring a shock.
“Market reaction was muted. In terms of interest rate expectations, futures prices still imply a further pause in December (63% probability of a cut), with the next reduction coming in February. The relatively dovish vote and tone of commentary provided a small boost to both equities and gilts, but nothing really meaningful.
“This event was always going to play second fiddle to the Budget on 26 November. The outcome of that and its impact on the growth and inflation outlook will play a large part in the next rates decision meeting on 12 December.”
Esther Watt, Bond Strategist at Evelyn Partners, said:
“Although widely anticipated and priced in, the vote saw a 5-4 split in the monetary policy committee with Taylor, Dhingra, Ramsden and Taylor all voting for a 25bp cut to 3.75%. This is more dovish than the 6-3 split expected and reflects some recent soft data on the real economy, a lowering of inflation expectations, and some slack in the labour market. Some MPC members will be deferring judgement until they see the contents of the Chancellor of the Exchequer’s highly anticipated Autumn Budget.
“The Bank lowered its GDP forecast for 2025 Q4 and 2026 Q4 to 1.4% (from 1.5% and 1.3%) while increasing 2027 Q4 to 1.7% (from 1.6%). It lowered CPI forecasts for 2025 Q4 to 3.5% (from 3.6%) while keeping 2026 Q4 and 2027 Q4 at 2.5% and 2% respectively. Unemployment is expected to be marginally higher over all periods – at 5% (from 4.9%) for 2025 Q4 and 2026 Q4 and 4.9% (from 4.8%) in 2027 Q4.
“In the seven weeks since the last MPC meeting, while the final read of the second quarter GDP print was revised up to 1.4% (1.2% prior and surveyed), economic data has shown signs of weakening. Inflation surprised for the September period by holding steady at 3.8% as opposed to peaking at 4.0% the BoE expected. Further to this, through August private sector pay growth continued to slow to 4.4% (4.7% prior; 4.5% surveyed) and unemployment surprised to the upside at 4.8% (4.7% prior; 4.7% expected). As a result, market expectations for the next interest rate cut had shifted forwards to February 2026 as opposed to April.
“In addition to the updated forecasts, the BoE implemented changes recommended by former Federal Reserve Chair Ben Bernanke’s review of the Bank’s forecasting, decision-making process and communication of policy in times of high uncertainty. A new Monetary Policy Overview section was included within the report as well as analysis of the risks and scenarios surrounding the current economic outlook and, perhaps of most interest to Central Bank watchers, more detail of the nine members views. While this meeting will be taken as a dovish hold, markets are little moved.”
