{
  "id": 7823194,
  "title": "Energy Shock Puts Bank of England Under Pressure to Raise Rates",
  "url": "https://urgent.news/2026/09/16/energy-shock-puts-bank-of-england-under-pressure-to-raise-rates",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-16T16:00:00.000Z",
  "source": {
    "name": "OilPrice",
    "slug": "oilprice",
    "url": "https://oilprice.com/Energy/Energy-General/Energy-Shock-Puts-Bank-of-England-Under-Pressure-to-Raise-Rates.html"
  },
  "original_language": "en",
  "account": "The Bank of England is facing growing pressure to raise interest rates this Thursday, amid a global bond market turmoil driven by worries over excessive government borrowing and stubborn inflation. Investors have urged the central bank to curb prices before an energy crisis sparked by the Iran conflict spreads throughout the economy, warning that a failure to do so could undermine the Bank's credibility and lead to a pound devaluation. Developed world government bonds have been pummeled in a historic sell-off, while oil prices have surged to multi-month peaks the week before the world's largest central banks decide on interest rate hikes. The yield on America's 10-year Treasury, the benchmark for global debt markets, breached the five percent mark for the first time since 2007, signaling continued investor unease over inflation's long-term trajectory. However, UK sovereign debt, issued through bonds known as gilts, has been offloaded more aggressively than any other major economy, with both long-dated and short-dated securities being dumped by traders. Long-term gilt yields neared six percent on Tuesday, their highest level since 1997, while shorter-term gilt prices suggest the Bank could hike rates up to four times in the next year. The recent gilt market movements seem to be demonstrating to central banks that they are running out of time; the market expects action. Anthony Brinkman, high yield portfolio manager at Principle Asset Management, stated that investors would continue to demand a higher price for holding government debt if the Bank of England fails to raise rates and articulate its long-term trajectory convincingly. The recent escalation in tensions in the Middle East, including Saudi Arabia shutting down a key pipeline responsible for oil shipments to the Red Sea, has reignited fears of supply constraints in global energy markets. Brent crude is now trading at its highest level since May, while European natural gas prices have hit multi-year highs. This renewed energy price surge has reignited fears that businesses will be forced to pass on their higher costs to consumers, driving up prices across the economy despite ample slack in Britain's labor market. Persistent inflation poses a threat to bond investors, whose real returns are eroded by rising prices. Andrew Wishart, senior UK economist at Berenberg, warned the Bank of England that it must follow through on its previous promises to raise interest rates or risk losing credibility and sparking a pound sell-off. He emphasized that the cost of raising Bank rates by 25 basis points is minimal compared to the potential damage to the Bank's credibility from inaction.",
  "summary": "The Bank of England is facing mounting pressure to raise interest rates on Thursday amid a global bond market rout fuelled by concerns over runaway government borrowing and sticky inflation. Investors told Threadneedle Street it was “essential” to rein in prices before the energy shock triggered by the Iran war spreads through the economy and that failing to do so would risk the Bank “losing…",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}