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GB: BoE Monetary Policy Report
Highlights
The February 2026 Monetary Policy Report presents a policy stance that has moved from inflation containment towards calibrated risk management. The narrow 54 vote to maintain Bank Rate at 3.75 percent reflects growing confidence that inflation is returning to target, alongside continued caution about the durability of that progress.
Disinflation is increasingly driven by favourable supply-side developments, particularly lower energy prices following Budget 2025 and subdued global cost pressures.
Domestically, wage growth and services inflation are easing, though they remain marginally above rates consistent with a sustained 2 percent inflation target. At the same time, economic activity is subdued, labour market slack is widening, and household demand remains cautious, increasing the risk that inflation could fall below target if policy remains overly restrictive.
Monetary policy has therefore entered a phase of measured and conditional easing. With Bank Rate already reduced by 150 basis points since August 2024, further cuts are likely but will require additional evidence. The MPC is signalling a careful balance since easing too quickly could risk renewed persistence, while delaying adjustment could amplify economic weakness. Future decisions will hinge on inflation expectations, wage dynamics, and the pace at which demand conditions evolve.
Definition
Formerly called the Quarterly Inflation Report, the Monetary Policy Report (MPR) is produced by the Bank of England (BoE) every February, May, August and November. The publication updates the central bank's assessment of recent economic developments at home and abroad and sets out the latest official forecasts for growth and inflation. As such, it provides the economic underpinnings for any change in monetary policy made by the Bank's Monetary Policy Committee (MPC). The MPR is released at the same time as the BoE makes its policy announcement
Description
For analysts who want to know the Monetary Policy Committee's latest thinking on the economy, the MPR provides an in-depth guide. As such it offers key information on economic trends and, in particular, areas where the Bank is primarily focused. The MPR is discussed at a press conference held by the BoE governor shortly after its release.