BoE Rate Hikes Loom as Inflation Pressures Rise

Citigroup and Goldman Sachs have revised their forecasts for Bank of England interest rate hikes, citing rising inflation pressures.

The two brokerages expect the BoE to raise rates later this year, with Goldman forecasting a quarter-percentage-point hike in November 2026 and Citigroup predicting one hike later this year and another in early 2027.

The predictions come as energy prices continue to rise, adding to concerns about Britain's inflation outlook. Wholesale energy prices have increased significantly, while data showed the UK economy expanded at its fastest annual pace in 18 months in July, supported by artificial intelligence and momentum from a strong first half.