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

The markets and economists expect the Bank of England will cut its bank rate by 25 basis point to 4.75% on Thursday. It will be the second such reduction in borrowing costs since the U.K. central bank began easing policy in August.