Morgan Stanley: Bank of England is expected to keep interest rates unchanged in the coming months.

In a report, Bruna Skarica of Morgan Stanley stated that the Bank of England may keep interest rates at 3.75% in the coming months, instead of raising them. Data from the London Stock Exchange Group shows that due to inflation concerns, the market expects the Bank of England to raise rates by 25 basis points before September, with a 40% chance of a second rate hike by the end of the year. Skarica noted that the conflict in the Middle East has increased inflation risks in the UK, but the weak job market could limit inflationary pressures. She mentioned that if global energy supplies return to normal levels, the Bank of England may signal a rate cut as early as the fourth quarter of 2026.