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Market Participants Survey results – March 2025

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 5–7 March 2025 with responses being received from 80 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 or 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
20 March 2025 MPC	4.50	4.50	4.50	79
8 May 2025 MPC	4.25	4.25	4.25	80
19 June 2025 MPC	4.25	4.25	4.25	79
7 August 2025 MPC	4.00	4.00	4.06	80
18 September 2025 MPC	4.00	4.00	4.00	79
6 November 2025 MPC	3.75	3.75	4.00	80
18 December 2025 MPC	3.75	3.75	4.00	79
5 February 2026 MPC	3.50	3.75	4.00	77
One year ahead (March 2026 MPC)	3.50	3.75	4.00	80
End-2026 Q2	3.25	3.50	4.00	77
End-2026 Q3	3.25	3.50	3.75	75
End-2026 Q4	3.13	3.50	3.75	75
Two years ahead (March 2027)	3.25	3.50	3.75	75
Three years ahead (March 2028)	3.00	3.50	3.94	74
Five years ahead (March 2030)	3.25	3.50	4.00	65

(a) Numbers in the above table are rounded to two decimal places.

1bi) 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)?

25th percentile	50th percentile	75th percentile	Number of responses
3.00	3.50	3.75	79

1bii) With reference to your answer to question 1bi, on the neutral rate, do you see risks around expectations being:

	Count
Skewed more to the downside	29
Broadly Balance	27
Skewed more to the upside	20

1ci) Please indicate the percentage probability that you attach to Bank Rate being at the following levels after the 20 March 2025 meeting. ⁽^a⁾

	Mean probability (%)
<4.25%	0.6
4.25%	12.0
4.50%	86.1
>4.50%	1.2

(a) In the question provided to respondents, the different Bank Rate outcomes spanned <3.25% and >5.75% 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. 78 respondents answered this question.

1cii) Please indicate the percentage probability that you attach to Bank Rate being at the following levels after the 8 May 2025 meeting. ⁽^a⁾

	Mean probability (%)
3.75%	0.7
4.00%	9.1
4.25%	64.4
4.50%	24.8
>4.50%	0.9

(a) In the question provided to respondents, the different Bank Rate outcomes spanned <3.25% and >5.75% 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. 78 respondents answered this question.

1d) Please assign percentage probabilities to Bank Rate reaching its lowest level this cycle, or ‘trough rate’, at the following levels. ⁽^a⁾

	Mean probability (%)
At the current level of 4.50%	2.8
4.25%	3.7
4.00%	13.3
3.75%	15.6
3.50%	21.0
3.25%	13.9
3.00%	12.7
2.75%	6.8
2.50%	3.9
2.25%	1.8
<2.25%	4.4

(a) Mean probabilities are rounded to one decimal place. 76 respondents answered this question.

1e) Please weight the following factors (%) in terms of their importance in influencing your expectations for the near-term path for Bank Rate. ⁽^a⁾

	Mean weighting (%)
Your own perceptions of the UK inflation outlook	21.7
Your own perceptions of the outlook for UK activity	19.2
Realised inflation and growth data	17.6
The MPC’s projections and observations on the broader outlook	19.0
Global influences	20.4
Other	2.1

(a) Mean weightings are rounded to one decimal place. 79 respondents answered this question.

Question 2: Macroeconomic outlook

2a) Please provide the annual rate of CPI inflation – conditioned on your Bank Bank Rate expectations (question 1a) – that you see as most likely at each of the following time horizons. ⁽^a⁾

	25th percentile	50th percentile	75th percentile	Number of responses
End-2025 Q1	2.7	2.9	3.0	76
End-2025 Q2	3.0	3.2	3.5	76
End-2025 Q3	3.0	3.5	3.7	76
End-2025 Q4	3.0	3.1	3.4	76
One year ahead	2.5	2.8	3.0	75
Two years ahead	2.0	2.2	2.5	74
Three years ahead	2.0	2.0	2.5	72
Five years ahead	2.0	2.0	2.5	71

(a) Numbers in the above table are rounded to one decimal place.

2bi) Please assign probabilities to the following rates of annual CPI inflation three years ahead. ⁽^a⁾

	Mean probability (%)
<=1.00%	2.9
1.01%–1.40%	3.8
1.41%–1.80%	10.4
1.81%–2.20%	33.0
2.21%–2.60%	25.4
2.61%–3.00%	14.8
>3.00%	9.8

(a) Numbers in the above table are rounded to one decimal place. 70 respondents answered this question.

2bii) Please assign probabilities to the following rates of annual CPI inflation on average from 5 years ahead to 10 years ahead (ie analogous to the five-year, five-year forward rate). ⁽^a⁾

	Mean probability (%)
<=1.00%	2.2
1.01%–1.40%	3.5
1.41%–1.80%	11.2
1.81%–2.20%	34.9
2.21%–2.60%	26.1
2.61%–3.00%	13.2
>3.00%	8.9

(a) Numbers in the above table are rounded to one decimal place. 68 respondents answered this question.

2c) At the February meeting, the Committee stated that GDP growth has been weaker than expected at the time of the November Monetary Policy Report and that in addition to the risks around inflation persistence, there are also uncertainties around the trajectories of both demand and supply in the economy. With this in mind, which of the following best characterises your perception of the recent profile of activity?

	Count
Weakness in demand	29
A combination of both	43
Weakness in supply	6

2d) Please provide the annual rate of UK GDP growth – conditioned on your Bank Rate expectations (question 1a) – that you see as most likely at each of the following time horizons. ⁽^a⁾

	25th percentile	50th percentile	75th percentile	Number of responses
2025	0.75	1.00	1.20	76
2026	1.00	1.25	1.50	76
2027	1.20	1.30	1.50	70

(a) Numbers in the above table are rounded to two decimal places.

Question 3: Expectations for balance sheet and gilt yields

3a) At its September 2024 meeting the MPC voted to reduce the stock of UK government bonds held for monetary policy purposes by £100 billion over the following 12 months to September 2025, to a total of £558 billion. Please provide the annual reduction in the stock of gilts held in the Asset Purchase Facility, comprising both maturing gilts and gilt sales in initial purchase proceeds terms, that you see as most likely over the following annual review cycles (£ billions). ⁽^a⁾

	25th percentile	50th percentile	75th percentile	Number of responses
October 2025–September 2026	70	85	100	66
October 2026–September 2027	31	50	80	65
October 2027–September 2028	28	50	75	66
October 2028–September 2029	37	40	60	65

(a) Numbers in the above table are rounded to the nearest billion

3b) Noting that the Office for Budget Responsibility’s Spring Forecast Update will take place on 26 March, what is your expectation for the Debt Management Office’s planned annual gilt issuance in the 2025–26 financial year (£ billions)?

	25th percentile	50th percentile	75th percentile	Number of responses
2025–26	300	310	315	55

3c) What do you see as the most likely level for the 10-year gilt yield at the following points in the future (%)?

	25th percentile	50th percentile	75th percentile	Number of responses
End-June 2025	4.37	4.50	4.60	72
End-December 2025	4.00	4.30	4.60	72
End-June 2026	3.90	4.20	4.53	72

Question 4: Expectations for exchange rates

4a) What do you see as the most likely level for GBPUSD one year ahead?

25th percentile	50th percentile	75th percentile	Number of responses
1.2500	1.2900	1.3075	66

4b) What do you see as the most likely level for EURGBP one year ahead?

25th percentile	50th percentile	75th percentile	Number of responses
0.8125	0.8400	0.8500	66

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