J.P. Morgan says BoE right to hold rates as inflation stays stubbornly high

J.P. Morgan Asset Management’s Zara Nokes said the Bank of England made the “right call” in keeping its policy rate unchanged on November 6, arguing that inflation remains far too high for the central bank to risk easing.

Nokes noted that while the labour market is cooling, other indicators — including retail sales and consumer confidence — point to a more resilient UK economy. She cautioned that household inflation expectations are rising, raising the risk of renewed price pressures.

Looking ahead, Nokes warned that the balance of risks could shift in 2026 if the UK government unveils large near-term tax hikes in the Autumn Budget, but said that until inflation shows “more meaningful progress” toward the 2 per cent target, the BoE must remain highly cautious about cutting rates.

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Goldman Sachs were tipping a cut, and have rolled that call forward to the next meeting:

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