BoE Rate Hike Imminent as J.P. Morgan Sees Inflation Risks

The Bank of England (BoE) is expected to raise interest rates by 25 basis points in February, according to J.P. Morgan's latest forecast.

The prediction comes after the BoE's Monetary Policy Committee voted 6-3 to keep borrowing costs at 3.75% on September 16, but revised its inflation forecast upward to above 4% in early 2027.

J.P. Morgan's senior economist Allan Monks expects a rate hike in November and another one in 2027, citing geopolitical risks such as the Iran war.

The BoE also paused its sales of government bonds for six months and began a longer-term overhaul of how it shrinks its debt holdings, which sent bond yields lower.