BofA Sees Two BoE Rate Hikes as Energy Prices Fuel Inflation Concerns

Bank of America Global Research has revised its forecast for the Bank of England (BoE) interest rates, predicting two hikes over the next six months due to rising energy prices.

The brokerage expects a 25 basis point rate hike in November and another in February, reversing its previous forecast that rates would remain unchanged before cutting in November 2027.

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

Markets are pricing in a 67% chance of a BoE rate hike in November, with another increase expected in December, according to LSEG data.