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2026-09-18 16:58:09
[UBS and RBC Capital Markets Expect Bank of England to Raise Rates by 25 Basis Points in November] ⑴ UBS and RBC Capital Markets currently expect the Bank of England to raise interest rates by 25 basis points at its next meeting in November, driven by the persistent risk of high inflation due to rising energy prices. ⑵ Their research report states that the Bank of England will conclude that the cost of high inflation and potential damage to its credibility outweighs the current tightening policy, only to find that inflation is less persistent than expected. ⑶ The bank currently expects the Bank of England to raise interest rates by 25 basis points each in November and February; previously, it predicted rate cuts in February and April. ⑷ The report states that this rate hike is not the beginning of a tightening cycle, but rather an "adjustment" operation aimed at signaling a proactive response from the central bank. ⑸ RBC's research report states that given the lack of signs of an agreement on the Strait of Hormuz situation, there are no triggering factors to push energy prices down. (6) If the situation cannot be resolved, high energy prices will have entered their ninth month by the time the Bank of England meets on November 5. (7) The bank previously predicted that the Bank of England would maintain the interest rate at 3.75% until the end of next year.
