Barclays expects the Bank of England to raise interest rates by 25 basis points in November. It cited a "dramatic change" in the medium-term energy outlook and warned that a prolonged Middle East conflict could lead to further monetary tightening. The Bank of England held its policy rate at 3.75% on the 17th, as expected, but projected that inflation would exceed 4% in early 2027, and its meeting minutes also struck a more hawkish tone. Barclays strategists also suggested that if the Middle East conflict continues, there is room for another 25 basis point hike in February 2027. JPMorgan Chase also expects the Bank of England to raise rates in November and in February 2027, revising its previous forecast of one hike in November followed by two cuts in 2027.
Barclays PLCBarclays is the source of the BoE hike forecast; rate hikes could support bank margins but also weigh on the economy.
JPMorgan Chase & CoBarclays and JPMorgan expect BoE rate hikes, pushing gilt yields up and bond prices down.
