BoE Expected to Hold Rates Despite Soaring Energy Prices

The Bank of England is expected to keep interest rates unchanged at its upcoming meeting on Thursday. Despite this, investors are watching for any hint that the central bank might raise borrowing costs in response to soaring energy prices.

Financial markets have priced in an 80% chance of a rate hike in November, but economists polled by Reuters last week were less convinced, with only three out of nine Monetary Policy Committee members expected to vote for a hike this week.

The recent jump in energy prices triggered by the Iran war has shifted opinion towards raising interest rates, following hikes by the European Central Bank and the US Federal Reserve. The latter raised borrowing costs on Wednesday, citing stubborn inflation pressure driven in part by energy costs.