UK Economic Outlook: Interest Rates May Drop to 3.0% in 2026
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 07 2026
0mins
Source: CNBC
- Interest Rate Outlook: The Bank of England reduced the base rate from 4.75% to 3.75% in 2025, with expectations for further cuts in 2026; however, due to inflation at 3.2%, it may be unwise to anticipate rates falling below 3%.
- Unemployment Rate Concerns: As of October 2025, the UK's unemployment rate stood at 5.1%, with projections indicating it could rise to 5.5% in 2026, marking an 11-year high and reflecting economic weakness and increased hiring costs.
- Business Confidence Recovery: Although UK business investment was the weakest in the G7 in 2025, there are expectations for improvement in 2026, particularly in research and development, indicating cautious optimism among firms about future prospects.
- IPO Market Recovery Hopes: With only 22 IPOs in London in 2025, significantly below historical averages, there is optimism for 2026 as market performance improves and new policies are implemented to attract more listings, potentially revitalizing market activity.
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Analyst Views on PWP
Wall Street analysts forecast PWP stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for PWP is 20.00 USD with a low forecast of 20.00 USD and a high forecast of 20.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
1 Analyst Rating
0 Buy
1 Hold
0 Sell
Hold
Current: 22.530
Low
20.00
Averages
20.00
High
20.00
Current: 22.530
Low
20.00
Averages
20.00
High
20.00
About PWP
Perella Weinberg Partners is an independent advisory company that provides strategic and financial advice to clients across active industry sectors and international markets. Its single business segment is to provide advisory services, including advice related to strategic and financial decisions, mergers and acquisitions execution, shareholder engagement advisory, financing and capital solutions advice, with a focus on restructuring and liability management, capital markets advisory, and private capital placement, as well as specialized underwriting and research services for the energy and related industries. Its range of global clients includes large public multinational corporations, mid-sized public and private companies, financial sponsors, individual entrepreneurs, private and institutional investors, creditor committees and government institutions. Its areas of industry focus include consumer and retail, energy & energy transition, financial services & fintech, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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