City Economists Doubt Bank Rate Will Reach 4.75% by Next Summer

City economists have pushed back on expectations that the Bank of England will raise interest rates to 4.75% by next summer, according to The Guardian. Experts cited in the report said the central bank is unlikely to lift rates by a full percentage point, and suggested rates could instead be lowered by the end of 2027.

The assessment challenges the more aggressive tightening path that had been priced into expectations for the coming year. Rather than delivering a full percentage point of increases to take the Bank Rate to 4.75%, economists now see that threshold as unlikely to be reached within the next summer window.

The revised view points to a shallower trajectory for borrowing costs, with the possibility that the direction of policy shifts toward easing by the end of 2027. That framing implies economists expect the peak in rates to fall short of the level markets had anticipated, and that the subsequent move could be downward rather than a prolonged hold at elevated levels.

For investors, the signal matters for how they position across rate-sensitive assets. A path that stops short of 4.75% and eventually reverses would alter the calculus for bond yields, mortgage pricing and the discount rates applied to equities. The economists' view, as reported, rests on the judgment that a full percentage point of further increases is unlikely rather than certain, leaving the timing and scale of any easing dependent on how the outlook evolves between now and the end of 2027.

The report does not specify the current level of the Bank Rate or the precise timing of any anticipated cuts, and the economists' projections remain forecasts rather than commitments from the central bank.