BofA Expects Two BoE Rate Hikes Amid Energy Price Concerns

Bank of America Global Research (BofA) has revised its forecast for interest rates set by the Bank of England, now predicting two hikes over the next six months.

The central bank is expected to raise rates by 25 basis points in November and February, reversing a previous prediction that rates would remain unchanged before a cut in November 2027.

This shift follows last week's meeting where policymakers struck a firmer tone on inflation risks, particularly those stemming from the recent surge in oil and natural gas prices.

According to BofA economists, 'the passthrough of the energy shock to domestic inflation and second-round effects will remain somewhat contained, but risks are on the upside.'