A Bank of England quarterly Market Participants Survey carried out April 15-17 found that the financial firms polled last month did not expect the central bank to lift interest rates during the current year, although they also no longer anticipated a cut.
The survey produced a median forecast for Bank Rate at the end of 2026 of 3.75%. That marks an upward revision from the poll taken three months earlier, when respondents had expected a reduction to 3.25% by the end of 2026.
By contrast with the survey results, interest rate futures at the time of the release were priced to reflect at least two quarter-point rate increases within the year. This creates a notable divergence between the forward pricing in derivatives markets and the aggregate expectations of the financial firms sampled in the BoE poll.
The Market Participants Survey also reported no change in expectations for the BoE's quantitative tightening (QT) over the specified 12-month period. Respondents left the anticipated QT total unchanged at 50 billion pounds for the period running from October 2026 through September 2027. For reference in currency terms, the release included the exchange rate of $1 = 0.7352 pounds as provided in the survey material.
Taken together, the survey results show a shift in the median outlook for policy rates at the end of 2026 relative to three months earlier, while short-term market pricing signalled a view of near-term rate increases. The QT expectation remained steady in the poll, indicating that respondents did not alter their near-term projection for central bank balance sheet reductions for the specified year.
Methodology note: The findings reported here are drawn from the Bank of England's quarterly Market Participants Survey conducted April 15-17 and published by the institution. The figures and comparisons reflect the responses and market pricing referenced in the BoE release.