The Bank of England is expected to cut interest rates by 25 basis points to 4%, the lowest since March 2023, as it balances persistent inflation with mounting concerns over economic growth and the labour market. The move, anticipated by markets, would mark a fifth straight quarter-point cut and see the BOE move ahead of the Fed in its easing cycle. Updated forecasts are likely to reflect stronger short-term inflation due to rising energy and food costs, but also a weaker jobs market following April’s tax hikes. The Monetary Policy Committee remains cautious, likely keeping its “gradual and careful” guidance while divisions persist within the nine-member panel. A three-way split is expected, with some pushing for a larger cut and others wanting no change. Markets currently price in two more cuts this year, with rates settling around 3.5% in 2026. Traders will watch for hints of a slower pace or adjustments to the bank’s bond sale strategy amid pressure on long-term gilt yields.