The central bank said future cuts would be gradual amid higher inflation forecasts after the new government introduced spending and tax increases in its budget.

Barclays expects the Bank of England to hold interest rates at its December meeting, revising its prior forecast of a cut, citing the central bank's cautious tone that emphasized uncertainty and gradual policy moves.

The Bank of England has cut its main interest rate by a quarter of a percentage point after inflation across the U.K. fell below its target rate of 2%.