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2026-09-18 19:26:09
[Barclays and UBS Predict Bank of England Rate Hike in November, Inflation Risks Continue to Rise] ⑴ The Bank of England kept its benchmark interest rate unchanged at 3.75% this week, but raised its inflation forecast, predicting that inflation may exceed 4% by early next year. The meeting minutes released a hawkish tone. Barclays and UBS have both stated that they believe the Bank of England will resume raising interest rates as early as November. ⑵ UBS economists pointed out that if inflation remains high, the cost of damaging the central bank's credibility will outweigh the current tightening; the bank predicts that interest rate cuts will begin in the fourth quarter of 2027, with rates falling back to 3.25% by the third quarter of 2028. ⑶ Geopolitical conflicts in the Middle East are pushing up energy price expectations, becoming a core variable for rising inflation; market pricing shows a probability of about 61% for a Bank of England rate hike in November, and the market also expects a possible rate hike in December. (4) Opinions differ among major institutions: Goldman Sachs also anticipates a rate hike in November, but believes that a weakening economy or falling energy prices will postpone the hike; Morgan Stanley judges that if energy prices cool down, central banks will maintain interest rates unchanged for an extended period; Bank of America, however, believes that the rate hike is merely a preventative measure to address inflation risks.
