ABN AMRO highlights a more dovish tone from the MPC after its earlier hawkish stance in March. The bank still expects an insurance rate hike over summer, albeit with less conviction, before a return to a wait-and-see approach as energy supplies normalise in Q3. With policy already restrictive, rate cuts are projected to resume from late 2026 onwards.

Insurance hike then wait-and-see

"The MPC has struck a more dovish tone following its hawkish communication at the March meeting."

"We still expect the BoE to do an insurance rate hike over the summer, but with a lower conviction."

"Ultimately we expect the MPC to pivot back to a wait-and-see approach, assuming energy supplies gradually normalise in Q3."

"This reflects that rates are already in restrictive territory, and the MPC’s historically volatile but ultimately dovish bias."

"We expect rate cuts to resume from late 2026 onwards."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)