Bank of England poised to raise rates but may push back on bets for more
MANCHESTER: The Bank of England (BoE) is expected to bow to inflation pressure from soaring energy costs and raise interest rates on Thursday, though it may push back against investors' bets that several more increases will follow next year.
The Bank of England (BoE) is expected to raise interest rates on Thursday in response to inflation pressure from soaring energy costs. Economists surveyed by Reuters anticipate the BoE increasing Bank Rate to 4% from 3.75%, its first hike since August 2023. The central bank has faced criticism for underestimating the persistence of inflation during the last energy cost surge.
BoE Governor Andrew Bailey insists the Bank cannot afford to wait for definitive proof of second-round effects before acting. Inflation has been running hotter than the BoE's expectations, with consumer prices rising 3.5% in the year to September, compared to the central bank's July forecast of 3%. Some members of the Monetary Policy Committee (MPC) have criticized the BoE's handling of the current situation, but even they may hesitate to endorse market pricing for three to four additional rate hikes in 2027, which would push Bank Rate between 4.75% and 5%.
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- Bank of England poised to raise rates but may push back on bets for more businesstimes.com.sg
- Bank of England poised to raise rates but may push back on bets for more investing.com
