BOA Predicts BOE Hikes in 2026 and 2027 Amid Rising Inflation Concerns
Bank of America Global Research is predicting two interest rate hikes from the Bank of England in 2026 and 2027. The bank expects a 25-basis-point increase at both the November 2026 and February 2027 meetings, which would bring the policy rate to 4.25%. This forecast is in line with other major brokerages, including J.P. Morgan, Barclays, and UBS.
Just months ago, Bank of America Global Research had predicted that the BOE would hold rates steady at 3.75% for all of 2026. However, as inflation risks have grown, the bank has revised its outlook to include two hikes.
The shift in forecast is due to concerns about inflation accelerating toward 4% early next year, driven by geopolitical tensions and energy price shocks from the Middle East. The BOE had previously been on a gradual easing path, bringing rates down to 3.75%, but reversing course would be a meaningful policy U-turn.