# Every Economist Reuters Polled Expects Israel's Central Bank to Sit Out the Election

> All fifteen economists in a Reuters poll expect the Bank of Israel to hold its benchmark rate at 3.25 percent on Wednesday, pausing a three-cut streak until the October 27 election has settled who forms the next government.

- Source: Israel Today
- Canonical URL: https://israeltoday.news/article/bank-of-israel-pause-rate-cuts-october-27-election
- Author: Eitan Regev
- Section: Business
- Published: 2026-10-20T09:00:00.000Z
- Updated: 2026-10-20T09:00:00.000Z
- Tags: Bank of Israel, Elections, Interest Rates

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Every one of the fifteen economists Reuters polled expects the Bank of Israel to leave its benchmark interest rate unchanged at 3.25 percent on Wednesday, a four year low the bank reached through three consecutive cuts in May, July and September, part of a wider easing cycle of five quarter point reductions that began last November. The pause breaks that streak for the first time this year, and every economist surveyed agrees on why: the vote on 27 October.

Inflation gives the bank room to keep cutting if it wanted to, running at 1.6 percent in September and 1.5 percent in August, comfortably inside its 1 to 3 percent target, and the economy grew at an annualized 15.4 percent in the second quarter. Barclays summed up the pause as political uncertainty keeping the central bank on hold rather than any economic reason to stop, a read shared across the economists Reuters surveyed.

The uncertainty is about which government Israel ends up with, not just whether it gets one. Polls show both Netanyahu's bloc and the opposition led by Gadi Eisenkot falling short of a majority on their own, and IBI chief economist Rafi Gozlan said markets are specifically worried that a Netanyahu-led bloc would raise Israel's risk premium, primarily due to concerns over adverse implications for both foreign relations and the security situation. A rate cut nine days before voters decide that question would look like the central bank taking a side, even if its reasoning was purely economic.

The pause is not expected to last past the election. Economists still see at least one more quarter point cut ahead, taking the rate to 3 percent, once a government is in place and the bank can judge the shape of its own risk premium rather than guess at it. Until then, holding steady is itself the Bank of Israel's answer to a vote it has no official role in and every reason to stay out of.

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Originally published by Israel Today. Free to cite with attribution and a link to https://israeltoday.news/article/bank-of-israel-pause-rate-cuts-october-27-election.