## 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 29 November–1 December 2023 with responses being received from 72 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 | |
---|---|---|---|---|

14 December 2023 MPC | 5.25 | 5.25 | 5.25 | 72 |

1 February 2024 MPC | 5.25 | 5.25 | 5.25 | 72 |

21 March 2024 MPC | 5.25 | 5.25 | 5.25 | 72 |

9 May 2024 MPC | 5.19 | 5.25 | 5.25 | 72 |

20 June 2024 MPC | 5.00 | 5.25 | 5.25 | 72 |

1 August 2024 MPC | 4.75 | 5.00 | 5.00 | 72 |

19 September 2024 MPC | 4.75 | 4.75 | 5.00 | 72 |

7 November 2024 MPC | 4.44 | 4.50 | 4.75 | 72 |

One year ahead (December 2024 MPC) | 4.19 | 4.50 | 4.50 | 72 |

End-2025 Q1 | 3.75 | 4.00 | 4.25 | 68 |

End-2025 Q2 | 3.50 | 3.75 | 4.00 | 68 |

End-2025 Q3 | 3.44 | 3.50 | 4.00 | 68 |

End-2025 Q4 | 3.25 | 3.50 | 3.75 | 68 |

End-2026 Q4 | 3.00 | 3.50 | 3.56 | 68 |

End-2028 Q4 | 3.00 | 3.50 | 3.50 | 66 |

1bi) Please indicate the percentage probability that you attach to Bank Rate being at the following levels after the December meeting. Responses should sum to a total of 100%. ^{(}^{a}^{) }

Mean probability (%) | |
---|---|

<5.00% | 0.1 |

5.00% | 2.7 |

5.25% | 90.2 |

5.50% | 6.8 |

>5.50% | 0.1 |

#### 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. 70 respondents answered this question.

1bii) Please indicate the percentage probability that you attach to Bank Rate being at the following levels after the February meeting. Responses should sum to a total of 100%. ^{(}^{a}^{) }

Mean probability (%) | |
---|---|

<5.00% | 1.2 |

5.00% | 12.4 |

5.25% | 74.3 |

5.50% | 11.3 |

>5.50% | 0.9 |

#### 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. 70 respondents answered this question.

1c) Please indicate the percentage probability that you attach to Bank Rate being at the following levels one year ahead (December 2024 MPC). Responses should sum to a total of 100%. ^{(}^{a}^{) }

Mean probability (%) | |
---|---|

<3.00% | 3.6 |

3.00%–3.49% | 4.2 |

3.50%–3.99% | 9.8 |

4.00%–4.49% | 27.6 |

4.50%–4.99% | 32.0 |

5.00%–5.49% | 16.8 |

5.50%–5.99% | 4.5 |

>=6.00% | 1.5 |

#### Footnotes

- (a) In the question provided to respondents, the different Bank Rate outcomes spanned <3.00% and >=7.50% at the extremes, and all 50 basis point intervals 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. 70 respondents answered this question.

1di) With reference to your answers to question 1a on most likely levels for Bank Rate, do you see the risks around your expectations at the two-year point as:^{ }

Count | |
---|---|

Skewed more to the upside | 12 |

Broadly balanced | 32 |

Skewed more to the downside | 26 |

1dii) With reference to your answers to question 1a on most likely levels for Bank Rate, do you see the risks around your expectations at the three-year point as:

Count | |
---|---|

Skewed more to the upside | 8 |

Broadly balanced | 46 |

Skewed more to the downside | 16 |

1e) 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 | 3.125 | 3.50 | 70 |

1fi) Since the last Market Participants Survey window, UK short rates have decreased. For example from 18 October, the one year, one year forward swap had decreased 69 basis points as of 5pm on 28 November 2023.

Please assess the contributions of the following factors (%) in affecting this move in the one year, one year forward swap rate. ^{(}^{a}^{) }

Mean weighting (%) | |
---|---|

UK specific developments | 34.6 |

Global developments | 56.7 |

Market technical factors | 8.1 |

Other | 0.6 |

1fii) Within UK specific developments please weight the following sub-factors in terms of their importance in driving these moves. Responses must sum to a total of 100%. ^{(}^{a}^{)}

Mean weighting (%) | |
---|---|

UK specific demand outlook | 41.2 |

UK specific supply outlook | 26.5 |

Changing perceptions about the MPC's reaction function | 26.0 |

Other UK developments | 6.3 |

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 (%) | |
---|---|

Inflation based indicators (eg services price inflation or other aspects of headline inflation) | 32.1 |

Measures of wage growth | 25.1 |

Indicators of labour market tightness (eg unemployment data) | 18.6 |

Activity based indicators (eg GDP growth) | 13.4 |

The MPC’s communications on the inflation outlook | 10.2 |

Other | 0.6 |

### Question 2: Macroeconomic outlook

2a) Please provide the annual rate of CPI inflation – 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 | |
---|---|---|---|---|

End-2023 Q4 | 4.05 | 4.30 | 4.50 | 67 |

End-2024 Q1 | 3.50 | 3.80 | 4.00 | 67 |

End-2024 Q2 | 2.30 | 3.00 | 3.50 | 67 |

End-2024 Q3 | 2.35 | 2.80 | 3.10 | 67 |

One year ahead | 2.20 | 2.50 | 3.00 | 67 |

Two years ahead | 2.00 | 2.40 | 2.50 | 64 |

Three years ahead | 2.00 | 2.00 | 2.50 | 63 |

Five years ahead | 2.00 | 2.00 | 2.50 | 62 |

2bi) Please assign probabilities to the following rates of annual CPI inflation three years ahead. Responses should sum to a total of 100%. ^{(}^{a}^{) }

Mean probability (%) | |
---|---|

<=1.00% | 4.6 |

1.01%–1.40% | 5.1 |

1.41%–1.80% | 12.0 |

1.81%–2.20% | 27.0 |

2.21%–2.60% | 21.2 |

2.61%–3.00% | 17.8 |

>3.00% | 12.3 |

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 of 100%. ^{(}^{a}^{) }

Mean probability (%) | |
---|---|

<=1.00% | 4.1 |

1.01%–1.40% | 3.9 |

1.41%–1.80% | 10.7 |

1.81%–2.20% | 31.3 |

2.21%–2.60% | 23.8 |

2.61%–3.00% | 16.2 |

>3.00% | 10.1 |

2c) The November 2023 Monetary Policy Report (MPR) set out the MPC’s projections for annual (calendar year) UK GDP growth as: 2024 +0%, 2025 +0.25%, 2026 +0.75%. How does your most likely profile for UK GDP growth differ in percentage points from that of the assessment in the November MPR – conditioned on your Bank Rate expectations (question 1a)?

25th percentile | 50th percentile | 75th percentile | Number of responses | |
---|---|---|---|---|

2024 (+/- % difference versus MPR) | 0 | 0.10 | 0.30 | 66 |

2025 (+/- % difference versus MPR) | 0 | 0.28 | 0.50 | 64 |

2026 (+/- % difference versus MPR) | 0 | 0.25 | 0.50 | 62 |

### Question 3: Expectations for the Bank’s balance sheet and gilt yields

3a) At its September 2023 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 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 (£ billion)?^{ (}^{a}^{)}

25th percentile | 50th percentile | 75th percentile | Number of responses | |
---|---|---|---|---|

September 2024–September 2025 | 100 | 100 | 121 | 60 |

September 2025–September 2026 | 74 | 99 | 100 | 60 |

September 2026–September 2027 | 33 | 70 | 100 | 60 |

September 2027–September 2028 | 34 | 50 | 80 | 59 |

#### 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.

3b) 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 2024 | 3.79 | 4.00 | 4.25 | 64 |

End-December 2024 | 3.50 | 3.75 | 4.00 | 63 |

End-June 2025 | 3.25 | 3.50 | 3.85 | 63 |

### 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 |
---|---|---|---|

1.2475 | 1.2700 | 1.3000 | 60 |

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

25th percentile | 50th percentile | 75th percentile | Number of responses |
---|---|---|---|

0.8494 | 0.8625 | 0.8800 | 60 |

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.