The UK Pivot Approaches

Fiscal drag and weak demand are setting the stage for more BoE easing.

Back at the end of July, we published “Why The BoE Cut Twice To YE25”. In August, the central bank did cut rates by 25bps. Since then, market pricing eased for a second cut, but off the back of the CPI data this morning, along with other factors, market pricing is now steering towards a second cut for December.

We feel a cut in December is coming, backing up our view from earlier this summer, as our reasoning remains sound. Yet a few months on from the original note, the real juice in the trading ideas likely comes from looking out into H1 2026.