Market Participants Survey results – June 2024

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 June 2024 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 June 2024 MPC	5.25	5.25	5.25	79
1 August 2024 MPC	5.00	5.00	5.25	78
19 September 2024 MPC	5.00	5.00	5.00	78
7 November 2024 MPC	4.75	4.75	5.00	77
19 December 2024 MPC	4.50	4.75	4.75	78
6 February 2025 MPC	4.25	4.50	4.75	77
20 March 2025 MPC	4.25	4.50	4.50	76
8 May 2025 MPC	4.00	4.25	4.50	77
One year ahead (June 2025 MPC)	4.00	4.25	4.25	78
End-2025 Q3	3.75	4.00	4.25	77
End-2025 Q4	3.50	3.75	4.00	77
End-2026 Q1	3.25	3.50	3.75	74
Two years ahead (June 2026)	3.00	3.50	3.75	74
Three years ahead (June 2027)	3.00	3.50	3.75	74
Five years ahead (June 2029)	3.00	3.50	3.50	73

(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)? ⁽^a⁾

25th percentile	50th percentile	75th percentile	Number of responses
3.00	3.25	3.50	79

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

1bii) The median perceived neutral rate reported by MaPS respondents has increased from 1.75% in March 2022 to 3.25% in the latest survey (May 2024). To the extent your own perception of the neutral rate has gone up, please weight the following factors in driving this increase. ⁽^a⁾

	Mean probability (%)
Shorter-term influences (ie cyclical or other more transitory factors)	42.8
Slow-moving structural factors (ie long-term trends that impact the balance between the demand for capital and the stock of wealth available to finance it)	57.2

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

1ci) Please indicate the percentage probability that you attach to Bank Rate being at the following levels after the June 2024 meeting. Responses should sum to a total of 100%. ⁽^a⁾

	Mean probability (%)
<5.00%	0.4
5.00%	11.1
5.25%	87.8
>5.25%	0.6

(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. 78 respondents answered this question.

1cii) Please indicate the percentage probability that you attach to Bank Rate being at the following levels after the August 2024 meeting. Responses should sum to a total of 100%. ⁽^a⁾

	Mean probability (%)
<4.75%	0.2
4.75%	5.3
5.00%	48.9
5.25%	44.7
>5.25%	0.9

(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. 78 respondents answered this question.

1d) Please indicate the percentage probability that you attach to Bank Rate being at the following levels at end-December 2024. Responses should sum to a total of 100%. ⁽^a⁾

	Mean probability (%)
<3.00%	0.6
3.00%–3.49%	1.1
3.50%–3.99%	1.8
4.00%–4.49%	11.3
4.50%–4.99%	54.4
5.00%–5.49%	29.2
5.50%–5.99%	1.2
>=6.00%	0.5

(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. 76 respondents answered this question.

1ei) 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 one-year point as:

	Count
Skewed more to the upside	30
Broadly balanced	37
Skewed more to the downside	11

1eii) 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	22
Broadly balanced	42
Skewed more to the downside	12

1eiii) 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	14
Broadly balanced	44
Skewed more to the downside	18

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-2024 Q2	2.00	2.10	2.20	74
End-2024 Q3	2.00	2.20	2.40	74
End-2024 Q4	2.20	2.40	2.70	73
End-2025 Q1	2.00	2.30	2.60	73
One year ahead	2.00	2.30	2.50	75
Two years ahead	2.00	2.10	2.50	71
Three years ahead	2.00	2.00	2.50	69
Five years ahead	2.00	2.00	2.50	67

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

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%	2.9
1.01%–1.40%	5.1
1.41%–1.80%	11.2
1.81%–2.20%	31.5
2.21%–2.60%	24.9
2.61%–3.00%	15.8
>3.00%	8.6

(a) Numbers in the above table are rounded to one decimal place. 71 respondents answered this question.

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%	2.7
1.01%–1.40%	3.8
1.41%–1.80%	11.0
1.81%–2.20%	31.9
2.21%–2.60%	24.8
2.61%–3.00%	15.5
>3.00%	10.3

(a) Numbers in the above table are rounded to one decimal place. 71 respondents answered this question.

2c) 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
2024	0.50	0.70	0.80	74
2025	0.80	1.20	1.38	74
2026	1.00	1.25	1.50	70

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

2d) Wage growth and services price inflation are amongst the range of indicators the MPC has identified it is looking at to monitor the persistence of inflation. The MPC has also stated that it ‘remains prepared to adjust monetary policy as warranted by economic data to return inflation to the 2% target sustainably’.What do you see as the most likely readings for services price inflation and private sector wage growth at the point you expect the next change in Bank Rate to occur? ⁽^a⁾

	25th percentile	50th percentile	75th percentile	Number of responses
Services CPI inflation year on year (YoY)	4.90	5.00	5.40	70
Private sector regular average weekly earnings three months/YoY	5.00	5.00	5.50	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 2023 meeting the MPC voted to reduce the stock of UK government bonds held for monetary policy purposes by £100 billion over the following twelve months to September 2024, to a total of £658 billion. Please provide the annual reduction in the stock of gilts held in the APF, comprising both maturing gilts and gilt sales in initial purchase proceeds terms, that you see as most likely over the following annual review cycles (£ billion). ⁽^a⁾

	25th percentile	50th percentile	75th percentile	Number of responses
October 2024–September 2025	90	100	100	66
October 2025–September 2026	49	75	84	66
October 2026–September 2027	31	50	65	65
October 2027–September 2028	32	36	50	62

(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 ten-year gilt yield at the following points in the future (%)? ⁽^a⁾

	25th percentile	50th percentile	75th percentile	Number of responses
End-December 2024	3.90	4.00	4.20	72
End-June 2025	3.70	3.78	4.00	72
End-December 2025	3.50	3.75	3.95	71

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

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
GBPUSD	1.2500	1.2700	1.3000	67

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

	25th percentile	50th percentile	75th percentile	Number of responses
EURGBP	0.8300	0.8500	0.8650	68

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Market Participants Survey results – June 2024

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