BoE survey: the median expects Bank Rate flat at 3.75%, markets price more
Victoria Shinder2 min readThe Bank of England's Market Participants Survey for September, conducted from 2 to 4 September with 92 respondents, shows a gap between what rates experts think most likely and what the market prices.
The median modal expectation for Bank Rate is 3.75 percent after every MPC meeting from 17 September 2026 to September 2027, falling to 3.50 percent by the end of 2027 and 3.25 percent from the first quarter of 2028. The spread widens with time: for the December 2026 meeting the 75th percentile is already 4.00 percent. Respondents put a mean 86.3 percent probability on no change at the 17 September meeting and 12.7 percent on 4.00 percent; for 5 November the probability of 4.00 percent rises to 35.0 percent.
The survey also asked respondents who see market pricing above their own modal path to explain the difference. The largest weight, 35.4 percent, went to an upside skew in risk perceptions; 23.5 percent to average market expectations being higher than their own; 19.8 percent to extra uncertainty premia on lower-rate exposures; and 15.0 percent to technical factors such as positioning and hedging demand. Energy and commodity prices were the most important factor for the near-term rate path, at 25.9 percent.
Inflation expectations are high near term and return to target later: median CPI of 3.3 percent at the end of 2026, 2.5 percent one year ahead and 2.0 percent at three and five years. The median neutral rate is 3.25 percent, with 44 respondents seeing risks to it skewed up and 10 skewed down.
What it means
The survey separates two things a yield curve mixes together: the most likely path and the price of insurance against a worse one. The median respondent does not expect a hike, yet most of the gap to market pricing is explained by risk, not by a different central forecast. That is consistent with the Market Participants Group minutes published on 26 September, where participants said rate increases were visible in the curve alongside risk premia. The answers were collected before the 17 September decision.