According to the BoE’s latest Market Participants Survey, investors expect a steady easing cycle over the next year. Respondents see Bank Rate gradually reduced from the current 3.75% to around 3.0% by the March 2027 meeting, pointing to confidence that disinflation will allow policy to ease without urgency.
Despite expectations for lower rates, views on quantitative tightening were unchanged. The median forecast for gilt sales over the 12 months from October remained at GBP 50 billion.
At the same time, participants revised up their outlook for long-term yields. The median expectation for 10-year gilt yields at end-2026 rose to 4.25%, from 4.0% previously, indicating that while policy rates are expected to fall, investors see structural or fiscal factors keeping longer-dated yields elevated.
