BoE Likely to Hold Rates Steady Amid Rising Energy Prices

Nomura's Global Markets Research team has weighed in on the latest UK inflation data, which showed headline inflation at 3.1% in August, in line with expectations.

The team argues that this likely secures an unchanged Bank Rate from the BoE in September, but highlights rising energy prices and the ongoing Iran war as potential drivers of higher inflation and increased pressure for future tightening.

According to Nomura, elevated energy prices will continue to exert upward pressure on inflation over the rest of the year, putting policymakers under increasing pressure to make policy more restrictive.