Business
Bank of England set to hold rates as inflation rise cools cut expectations
The Bank of England is widely expected to keep interest rates on hold this week after inflation rose for the first time in five months, although markets believe the door remains open to a cut later in the spring.
Analysts expect the Bank’s Monetary Policy Committee (MPC) to vote to maintain the base rate at 3.75 per cent when it announces its decision on Thursday. The rate is already at a three-year low following four quarter-point cuts last year, which brought borrowing costs down from 5.25 per cent since July 2024.
The expected pause follows data showing inflation climbed to 3.4 per cent in December, moving further above the Bank’s 2 per cent target. While policymakers have signalled that rates are on a downward path, the latest inflation reading has strengthened the case for caution in the near term.
Markets are still pricing in two rate cuts this year, with the first potentially coming as early as March. Economists view February’s meeting as a brief pause rather than the end of the easing cycle.
The nine-member MPC has been closely divided in recent meetings, reflecting differing views over whether inflation is set to fall back quickly or remain stubbornly high. In December, the committee voted 5–4 in favour of a cut, with governor Andrew Bailey casting the deciding vote.
Analysts at UBS said they expect Bailey to back a hold this time. “After swinging the vote in favour of a cut in December, it is likely governor Bailey will vote for keeping rates on hold,” the bank said.
Meanwhile, economists at Morgan Stanley said labour market data could prove decisive for the next move. “We would expect Bailey to focus more on incoming jobs data, where we see a further uptick in unemployment. This could ultimately lead to a March cut,” they said.
EY Item Club also expects no change this week, describing a hold at 3.75 per cent as a “near-certainty”. The forecaster said the MPC is likely to signal that while another cut is possible, the rate-cutting cycle may be approaching its end.
The central bank will publish updated economic forecasts alongside Thursday’s decision, setting out its latest expectations for growth, inflation and unemployment. Bailey is also likely to face questions about recent volatility in global financial markets, driven in part by erratic tariff announcements and geopolitical tensions linked to Donald Trump.
In December, Bailey said he expected inflation to return to, or close to, the 2 per cent target by April. Price growth is forecast to ease as household bills fall following measures announced by Rachel Reeves, including the removal of some green levies and a freeze on rail fares.
For now, economists believe the Bank will opt for patience, balancing early signs of cooling inflation against lingering price pressures and uncertainty in the global economy.
Jamie Young
Jamie is Senior Reporter at Business Matters, bringing over a decade of experience in UK SME business reporting.
Jamie holds a degree in Business Administration and regularly participates in industry conferences and workshops.
When not reporting on the latest business developments, Jamie is passionate about mentoring up-and-coming journalists and entrepreneurs to inspire the next generation of business leaders.
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Analyst’s Disclosure: I/we have a beneficial long position in the shares of CRDF either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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In February 2026, Thai exports grew 9.9%YOY, driven by electronics and the US market, while imports surged 31.8%YOY. Middle East conflict and US tariffs pose risks, potentially worsening Thailand’s trade deficit.
Thai Export Performance in February 2026
Thai exports in February 2026 slowed to a growth of 9.9% year-on-year (YOY), with a total export value of USD 29,439.7 million. This was a significant deceleration from January’s 24.4% YOY surge and below forecasts. The export slowdown was coupled with a sharp 11.1% month-on-month seasonal adjustment contraction. Electronics led exports, expanding over 56.8% YOY due to global demand and investment in related industries, especially to the US, where exports rose 40.5%. Gold exports grew moderately by 18.2%, affected by falling global prices.
Import Trends and Trade Balance
Imports surged to USD 32,273.3 million, the highest in 50 months, rising 31.8% YOY, driven mainly by raw materials, intermediate goods, and capital goods like gold and electrical machinery. This import growth intensified the trade deficit, which reached USD -2,833.6 million in February, with a cumulative deficit of USD -6,137.1 million for the first two months of 2026.
Outlook and External Challenges
Thailand’s trade outlook faces challenges from the Middle East conflict and rising US import tariffs. The Middle East conflict, though limited in direct impact, may affect key export sectors and energy costs, worsening the trade deficit. Meanwhile, ongoing US tariff investigations under Section 301 pose export risks. The Ministry of Commerce projects 2026 export growth scenarios ranging from -3% to +1.1% YOY. SCB EIC will update economic forecasts by March’s end amid these evolving uncertainties.
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Michael Fitzsimmons is a retired electronics engineer and avid investor. He advises investors to construct a well-diversified portfolio built on a core foundation of a high-quality low-cost S&P500 fund. For investors who can tolerate short-term risks, he advises an over-weight position in the technology sector, which he believes is still in the early stages of a long-term secular bull-market. For dividend income, and as a 4th generation oil & gas man, Fitzsimmons suggests investors consider a position in large O&G companies that provide strong dividend income and dividend growth. Fitzsimmons’ articles on portfolio management recommend a top-down capital allocation approach that is aligned with each individual investor’s personal situation (i.e. age, retired/working, risk tolerance, income, net worth, goals, etc) and might include allocations into investment categories such as the S&P500, technology, dividend income, sector ETFs, growth, speculative growth, gold, and cash.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of PAAS, PSX either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
I am an electronics engineer, not a CFA. The information and data presented in this article were obtained from company documents and/or sources believed to be reliable but have not been independently verified. Therefore, the author cannot guarantee their accuracy. Please do your own research and contact a qualified investment advisor. I am not responsible for the investment decisions you make.
Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
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