Softer UK Jobs Data Lifts Odds of December BoE Rate Cut
A cooler snapshot of the UK labour market has shifted market expectations firmly toward a Bank of England interest-rate cut at its December meeting. Traders now see roughly four-in-five odds of a move, as investors reassess the policy path ahead of the Autumn Budget on 26 November.
Market-implied probabilities for a December cut have jumped to around 81%, up from about 61% before the latest jobs report. The swing comes on the heels of a narrow 5–4 Monetary Policy Committee vote to keep rates on hold last week, underscoring how sensitive the BoE’s decision-making remains to incoming data. Softer labour conditions strengthen the case that wage pressures and inflation are easing, increasing the likelihood of earlier policy easing.
Beyond December, futures pricing suggests a deeper easing cycle than previously anticipated. Investors now factor in approximately 65 basis points of cumulative rate cuts by the end of 2026, compared with around 57 basis points before the labour data. The Autumn Budget could further shape the trajectory for growth, inflation and gilt markets, adding another layer to the BoE’s monetary policy calculus.
Key Points: – Probability of a December Bank of England rate cut rose to about 81% from roughly 61% – Shift driven by softer UK labour market data – BoE held rates by a tight 5–4 vote at its last meeting – Markets now price around 65 bps of cuts by end-2026, up from about 57 bps – Autumn Budget on 26 November could influence the policy outlook and market pricing
