2025 Outlook: BoE Expected to Keep Rates Steady After September Pause

On September 18, 2025, the Bank of England (BoE) decided to maintain its key interest rate at 4%, following a series of rate cuts that began in mid-2024. This pause reflects ongoing concerns over persistent inflation, which remains significantly above the BoE’s 2% target. Governor Andrew Bailey stressed caution, noting that the UK still faces challenges with inflation and is not fully past the risk. We examine the factors influencing the BoE’s decision and explore the economic landscape for the remainder of 2025.