BoE Rate Hike Expectations Slip to Early 2027

Investors' expectations for the Bank of England's next rate hike have drifted into 2027, according to market prices. As of Thursday, only a quarter-point rate increase is priced in until the BoE's February 2027 meeting.

LSEG data showed that 24.3 basis points of rate increases are currently priced in by the time of the BoE's December 17 rate announcement, down from more than 25 bps for most of August.

Less than 4 bps of tightening is priced in for the BoE's September 17 meeting, implying just a 15% chance of a hike. This contrasts with 24 bps of tightening priced in for the European Central Bank at its September 10 decision.