Bank of England Poised to Raise Rates Amid Inflation Pressure, May Push Back on Further Hike Bets

The Bank of England is widely expected to increase its Bank Rate to 4.0% from 3.75% on Thursday, marking its first hike since August 2023. This anticipated move is driven by persistent inflation pressures, particularly from soaring energy costs. However, the central bank may simultaneously temper market expectations for several more rate increases next year. Governor Andrew Bailey has indicated that the BoE cannot delay action for conclusive proof of second-round effects on wages and prices, aiming to avoid past criticisms of underestimating inflation's persistence.