Overview
This survey forms part of the Bank’s quantitative market intelligence gathering. It is formulated by Bank of England staff and enhances policymakers’ understanding of market expectations. The questions involve topics that are widely discussed in the public domain, and never presume any particular policy action. Monetary Policy Committee (MPC) members are not involved in the survey’s design.
Survey respondents originate from a broad set of market participant firms, selected by the Bank based on a number of criteria, including: (i) relevant market activity in UK rates or money markets; (ii) expertise in UK rates markets and/or UK monetary policy; (iii) willingness to participate regularly in the survey and in the Bank’s market intelligence activity; and (iv) membership of one of the Bank’s external market committees.
Please contact MarketParticipantsSurvey@bankofengland.co.uk for queries or for further information.
Survey results
The survey was open from 18–20 October 2023 with responses being received from 79 market participants. For most questions, median responses across participants, along with the 25th and 75th percentiles, are reported.footnote [1] For questions that ask respondents to weight different factors or assign probabilities to specific outcomes, the mean weightings and probabilities are reported. For questions that ask respondents to select one option from a given set of possibilities – the respondent count against each option is reported.
Question 1: Expectations for Bank Rate
1a) What do you see as the most likely level of Bank Rate after the following MPC meetings? (a)
25th percentile | 50th percentile | 75th percentile | Number of responses | |
|---|---|---|---|---|
2 November 2023 MPC | 5.25 | 5.25 | 5.25 | 79 |
14 December 2023 MPC | 5.25 | 5.25 | 5.25 | 79 |
1 February 2024 MPC | 5.25 | 5.25 | 5.25 | 79 |
21 March 2024 MPC | 5.25 | 5.25 | 5.25 | 79 |
9 May 2024 MPC | 5.00 | 5.25 | 5.25 | 79 |
20 June 2024 MPC | 5.00 | 5.25 | 5.25 | 79 |
1 August 2024 MPC | 4.75 | 5.00 | 5.25 | 79 |
19 September 2024 MPC | 4.50 | 4.75 | 5.00 | 78 |
One year ahead (November 2024 MPC) | 4.25 | 4.50 | 5.00 | 75 |
End-2024 Q4 | 4.00 | 4.50 | 4.75 | 78 |
End-2025 Q1 | 3.75 | 4.00 | 4.50 | 74 |
End-2025 Q2 | 3.50 | 4.00 | 4.25 | 73 |
End-2025 Q4 | 3.06 | 3.50 | 4.00 | 74 |
End-2026 Q4 | 3.00 | 3.50 | 4.00 | 72 |
1bi) Please indicate the percentage probability that you attach to Bank Rate being at the following levels after the November meeting. Responses should sum to a total weight of 100%.(a)
Mean probability (%) | Number of responses | |
|---|---|---|
<5.00% | 0.1 | 78 |
5.00% | 2.3 | 78 |
5.25% | 77.2 | 78 |
5.50% | 19.8 | 78 |
>5.50% | 0.5 | 78 |
Footnotes
- (a) In the question provided to respondents, the different Bank Rate outcomes spanned <4.00% and >6.50% at the extremes, and all 25 basis point increments in between. Results have been aggregated where the mean probabilities above or below a certain outcome were close to or at zero. Mean probabilities are rounded to one decimal place.
1bii) Please indicate the percentage probability you attach to Bank Rate being at the following levels after the December meeting. Responses should sum to a total weight of 100%. (a)
Mean probability (%) | Number of responses | |
|---|---|---|
<4.75% | 0.2 | 78 |
4.75% | 0.4 | 78 |
5.00% | 3.6 | 78 |
5.25% | 65.2 | 78 |
5.50% | 27.2 | 78 |
5.75% | 3.3 | 78 |
>5.75% | 0.1 | 78 |
Footnotes
- (a) In the question provided to respondents, the different Bank Rate outcomes spanned <4.00% and >6.50% at the extremes, and all 25 basis point increments in between. Results have been aggregated where the mean probabilities above or below a certain outcome were close to or at zero. Mean probabilities are rounded to one decimal place.
1c) Please assign probabilities to the peak in Bank Rate being realised at the following levels, assuming that the highest probability weighting is assigned to the peak in Bank Rate you provided in question 1a. Responses should sum to a total weight of 100%. (a)
Mean probability (%) | Number of responses | |
|---|---|---|
At the current level of 5.25% | 62.0 | 77 |
5.50% | 22.7 | 77 |
5.75% | 9.4 | 77 |
6.00% | 3.4 | 77 |
6.25% | 1.3 | 77 |
6.50% | 0.5 | 77 |
>6.50% | 0.7 | 77 |
1d) At this point in time, what probability do you attach to an initial rate cut of any size occurring within the following time frames? Responses should sum to a total of 100%. (a)
Mean probability (%) | Number of responses | |
|---|---|---|
Between now and the end of 2024 H1 | 28.0 | 78 |
During 2024 H2 | 43.0 | 78 |
2025 onwards | 28.9 | 78 |
1e) With reference to your answers to question 1a on most likely levels for Bank Rate, how would you describe the balance of risks surrounding your expectations for Bank Rate at the following horizons?
Count | |||
|---|---|---|---|
Between now and the one-year point | At the two-year point | At the three-year point | |
Risks skewed towards a higher path for Bank Rate | 22 | 7 | 7 |
Risks to Bank Rate path broadly balanced | 32 | 27 | 28 |
Risks skewed towards a lower path for Bank Rate | 24 | 44 | 43 |
1f) And where do you see the level of Bank Rate at which monetary policy is neither expansionary nor contractionary (often referred to as the neutral, natural or equilibrium rate) (%)? (a)
25th percentile | 50th percentile | 75th percentile | Number of responses |
|---|---|---|---|
3.00 | 3.50 | 4.00 | 76 |
1g) Please weight the following factors (%) in terms of their importance in influencing your expectations for the future path of Bank Rate. Responses should sum to a total of 100%. (a)
Mean weighting (%) | Number of responses | |
|---|---|---|
Inflation-based indicators (eg services price inflation or other aspects of headline inflation) | 30.4 | 78 |
Measures of wage growth | 25.3 | 78 |
Indicators of labour market tightness (eg unemployment data) | 19.0 | 78 |
Activity-based indicators (eg GDP growth, purchasing managers’ index) | 14.7 | 78 |
The MPC’s communications on the inflation outlook | 9.3 | 78 |
Other | 1.3 | 78 |
1h) In its September communications the MPC reiterated that it would ‘continue to monitor closely indications of persistent inflationary pressures and resilience in the economy’. In response to evidence of more persistent inflationary pressures, how would you adjust the path of your most likely expectations for Bank Rate [question 1a]? Please assign comparative weights to the components that make up that path. Responses should sum to a total of 100%. (a)
Mean weighting (%) | Number of responses | |
|---|---|---|
The level of the peak in Bank Rate | 41.7 | 77 |
The duration of the peak in Bank Rate | 43.2 | 77 |
The extent of cuts beyond the peak | 15.1 | 77 |
Question 2: Macroeconomic outlook
2a) Please provide the annual rate of CPI inflation – conditioned on your Bank Rate expectations (question 1a) – you see as most likely at each of the following time horizons. For reference, the most recent CPI print for September was 6.7%. (a)
25th percentile | 50th percentile | 75th percentile | Number of responses | |
|---|---|---|---|---|
End-2023 Q4 | 4.40 | 4.70 | 5.00 | 75 |
End-2024 Q1 | 3.63 | 4.00 | 4.50 | 74 |
End-2024 Q2 | 2.60 | 3.20 | 3.80 | 73 |
End-2024 Q3 | 2.50 | 3.00 | 3.50 | 73 |
One year ahead | 2.50 | 3.00 | 3.50 | 74 |
Two years ahead | 2.00 | 2.50 | 3.00 | 72 |
Three years ahead | 2.00 | 2.10 | 2.50 | 72 |
Five years ahead | 2.00 | 2.00 | 2.50 | 69 |
2bi) Please assign probabilities to the following rates of annual CPI inflation three years ahead. Responses should sum to a total weight of 100%. (a)
Mean probability (%) | Number of responses | |
|---|---|---|
<=1.00% | 4.5 | 72 |
1.01%–1.40% | 6.1 | 72 |
1.41%–1.80% | 12.5 | 72 |
1.81%–2.20% | 24.5 | 72 |
2.21%–2.60% | 23.1 | 72 |
2.61%–3.00% | 14.5 | 72 |
>3.00% | 14.8 | 72 |
2bii) Please assign probabilities to the following rates of annual CPI inflation on average from five years ahead to ten years ahead (ie analogous to the five-year, five-year forward rate). Responses should sum to a total weight of 100%. (a)
Mean probability (%) | Number of responses | |
|---|---|---|
<=1.00% | 3.9 | 69 |
1.01%–1.40% | 4.7 | 69 |
1.41%–1.80% | 10.9 | 69 |
1.81%–2.20% | 27.5 | 69 |
2.21%–2.60% | 22.3 | 69 |
2.61%–3.00% | 17.4 | 69 |
>3.00% | 13.3 | 69 |
2c) The August 2023 Monetary Policy Report (MPR) set out the MPC’s projections for annual (calendar year) UK GDP growth as: 2023 +0.50%, 2024 +0.50%, 2025 +0.25%. How does your most likely profile for UK GDP growth differ in percentage points from that of the assessment in the August MPR – conditioned on your Bank Rate expectations [question 1a]?
25th percentile | 50th percentile | 75th percentile | Number of responses | |
|---|---|---|---|---|
+/- % difference versus MPR: 2023 | -0.10 | 0.00 | 0.10 | 70 |
+/- % difference versus MPR: 2024 | -0.25 | -0.10 | 0.10 | 71 |
+/- % difference versus MPR: 2025 | 0.00 | 0.25 | 0.75 | 69 |
2d) One of the MPC’s key judgements in the August MPR was that ‘the UK economy has been in excess demand over recent quarters, but an increasing degree of economic slack is expected to emerge after the middle of next year’. This was captured in the indicative projections for excess supply/excess demand consistent with the MPC’s August modal forecast: 2023 Q3 +0.5%, 2024 Q3 -0.5%, 2025 Q3 -1.25%, 2026 Q3 -1.5%. Relative to this assessment how would you characterise your expectation for the level of GDP relative to potential?
Count | |
|---|---|
More excess demand/less excess supply than the MPR | 20 |
A degree of economic slack that is more or less in line with the MPR | 25 |
Less excess demand/more excess supply than the MPR | 20 |
Unsure | 7 |
Question 3: Expectations for the Bank’s balance sheet and gilt yields
3a) In the minutes of its August 2022 meeting the MPC committed to review the reduction in the Asset Purchase Facility (APF) annually and, as part of that, to set an amount for the reduction in the stock of purchased UK government bonds over the subsequent 12-month period. At its September 2023 meeting the MPC voted to reduce the stock of purchased gilts held for monetary policy purposes by £100 billion over the period from October 2023 to September 2024, to a total of £658 billion. Beyond September 2024, what is the annual reduction in the stock of purchased gilts, comprising both maturing gilts and gilt sales, that you envisage will take place over the following MPC date reference periods? (a)
25th percentile | 50th percentile | 75th percentile | Number of responses | |
|---|---|---|---|---|
September 2024–September 2025 | 100 | 100 | 125 | 66 |
September 2025–September 2026 | 70 | 89 | 100 | 66 |
September 2026–September 2027 | 50 | 74 | 85 | 66 |
September 2027–September 2028 | 35 | 63 | 81 | 64 |
Footnotes
- (a) Respondents were provided with APF redemptions (as set out in the run-off profile published in Results and usage data) corresponding to each period.
3bi) According to the latest Debt Management Office (DMO) estimate in April 2023, gilt issuance of £237.8 billion is planned in the 2023–24 financial year. Reflecting on this and noting that an Autumn Statement will take place on 22 November, what do you expect the DMO’s actual annual gilt issuance to be in the 2023–24 financial year?
25th percentile | 50th percentile | 75th percentile | Number of responses | |
|---|---|---|---|---|
2023–24 (£ billions) | 220 | 233 | 242 | 60 |
3bii) What about in the 2024–25 financial year?
25th percentile | 50th percentile | 75th percentile | Number of responses | |
|---|---|---|---|---|
2024–25 (£ billions) | 210 | 250 | 270 | 53 |
3c) What do you see is the most likely level for the 10-year gilt yield at the following points in the future (%)? The level of the 10-year gilt yield as of 5pm on 17 October 2023 was 4.51%
25th percentile | 50th percentile | 75th percentile | Number of responses | |
|---|---|---|---|---|
End-December 2023 | 4.40 | 4.50 | 4.75 | 71 |
End-June 2024 | 4.00 | 4.25 | 4.50 | 71 |
End-December 2024 | 3.75 | 4.00 | 4.25 | 70 |
Question 4: Expectations for exchange rates
4a) What do you see is the most likely level for GBPUSD at the following points in the future? The level of GBPUSD as of 5pm on 17 October 2023 was 1.2203.
25th percentile | 50th percentile | 75th percentile | Number of responses | |
|---|---|---|---|---|
End-December 2023 | 1.2000 | 1.2100 | 1.2300 | 66 |
End-June 2024 | 1.1800 | 1.2200 | 1.2500 | 65 |
End-December 2024 | 1.2000 | 1.2200 | 1.2700 | 65 |
4b) What do you see is the most likely level for EURGBP at the following points in the future? The level of EURGBP as of 5pm on 17 October 2023 was 0.8680.
25th percentile | 50th percentile | 75th percentile | Number of responses | |
|---|---|---|---|---|
End-December 2023 | 0.8600 | 0.8700 | 0.8710 | 65 |
End-June 2024 | 0.8588 | 0.8690 | 0.8800 | 64 |
End-December 2024 | 0.8500 | 0.8600 | 0.8800 | 65 |
Throughout, the Xth percentile is calculated by ranking the survey responses in ascending order and reporting the response which is ranked in position k where k is (X/100)*(sample size – 1) + 1. For numeric answers, where k is not an integer (ie this position lies between two responses), the result is interpolated by applying the percentile proportional to the distance between them. Discontinuous answers, such as policy meeting dates, are not interpolated. Instead, the first response which covers at least X% of the sample is reported.