Analysts anticipate that the Bank of England will likely keep its benchmark interest rate at 4.25% at the meeting scheduled for June 19. Experts from leading financial institutions are optimistic and support maintaining the BoE's key rate.

Currency strategists from UBS, Deutsche Bank, and ING anticipate that the Monetary Policy Committee (MPC) will vote to put the key interest rate on hold. At the previous meeting in May, the central bank cut the interest rate by 25 basis points, marking the start of an easing cycle.

The Bank of England’s decision will come amid mixed economic signals. The regulator is particularly concerned about the weakening labor market. Over the past seven months, payroll employment has declined by 276,000, including 109,000 lay-offs in May. The unemployment rate reached 4.6% over the past three months, in line with the BoE’s forecast. Wage growth in the private sector slowed to 5% from 6%, slightly below the central bank’s projections in May.

Despite challenges in the labor market, analysts expect most MPC members to remain cautious regarding further rate cuts. However, some policymakers may vote in favor of another rate cut.

Inflation is still viewed as a key factor for the central bank. In April, annual inflation stood at 3.5%. However, the Office for National Statistics later acknowledged that the figure was overstated by 0.1 percentage point due to a calculation error. UBS now expects the CPI for May to slip to 3.3%.

Looking ahead, UBS, Deutsche Bank, and ING all forecast a series of rate cuts through the end of 2025. UBS predicts two further 25-basis-point reductions in August and November, which would bring the key rate down to 3.75% by year-end. Deutsche Bank anticipates rate cuts in August, November, and December, while ING expects rate cuts in August and November 2025.