The Bank of England (BoE) is expected to maintain its key interest rate at 4.25% during the upcoming Monetary Policy Committee (MPC) meeting on June 19, 2025.

Analysts predict a cautious approach from the MPC, with a potential voting split of 7-2 in favor of maintaining rates, although a 6-3 split could occur if more members support a rate cut.

Major financial institutions, including UBS, Deutsche Bank, and ING, anticipate that the MPC's decision will follow a 25 basis point cut made in May, signaling the start of a rate easing cycle.

Looking ahead, UBS forecasts two additional rate cuts of 25 basis points each in August and November 2025, leading to a year-end Bank Rate of 3.75%.

Both Deutsche Bank and ING also project rate cuts later in the year, with UBS suggesting terminal rates could reach 3.0% by 2026, while others estimate it at 3.25%.

Inflation remains a crucial factor in the BoE's decisions, with April's year-over-year inflation rate initially reported at 3.5%, later adjusted down by 0.1 percentage points due to a calculation error.

UBS forecasts that May's inflation figure will decline to 3.3%, with the release scheduled just before the rate decision.

Concerns regarding the UK job market are escalating, as HMRC payrolls have decreased by 276,000 over the past seven months, including a notable drop of 109,000 in May 2025.

The unemployment rate has risen to 4.6% for the three months ending in April, which aligns with the Bank's forecast for the second quarter of 2025.

Private sector wage growth has slowed from 6% to around 5%, falling short of the Bank's May projections by approximately half a percentage point, as noted by ING.

The MPC is likely to maintain its cautious guidance on easing monetary policy, emphasizing that decisions will not follow a predetermined path.