Groupama Asset Management sees BoE raising rates 25 basis points to 4.25% in February 2027
TLT•Groupama Asset Management expects the Bank of England to raise rates by 25 basis points in February 2027, to 4.25%, as a preventive move against energy-driven inflation. It expects inflation to reach 4.5% in the first quarter and about 5% in the second quarter of 2027.
1. Rate forecast
Groupama Asset Management expects another preventive Bank of England rate increase of 25 basis points in February 2027, taking rates to 4.25%. The forecast depends on the energy shock feeding into wages and services prices and, in the firm’s view, would not signal a new tightening cycle. All nine policymakers backed the latest increase, while inflation projections rose to 4.5% in the first quarter of 2027 and about 5% in the second, compared with September’s 3.5% forecast. The firm said restrictive financial conditions, slowing growth and fiscal restraint limit the economy’s capacity to absorb prolonged rate increases.
