Bank of England Holds Rates as Hawkish Tone Takes Over

The Bank of England has maintained its Bank Rate at 3.75%, but with a more hawkish tone, according to TD Securities' macro team.

The decision was made in a 6-3 vote, with governors Pill, Greene, and Mann dissenting for a hike.

The Bank of England sees inflation rising to 4% in Q1 2027, citing increased risks due to geopolitical tensions and the ongoing conflict in the Middle East.

TD Securities believes that further restrictive policy may be required if these risks materialize, with a possible rate hike in November or December.