Dutch International Group predicts that the Bank of England will keep interest rates unchanged until 2026, putting pressure on the pound

Dutch International Group economists believe that the Bank of England's forecast for inflation to approach 3% from the second half of this year to early next year is based on the benchmark expectation that the Bank of England will remain inactive throughout 2026, with two interest rate cuts starting from spring 2027. The pound has been under pressure recently, and investors are cautious about the financing sources for the new Prime Minister Burnham's commitments on transportation fares and electricity caps. The market is concerned about the pressure on public finances.