Morgan Stanley Predicts Double BoE Rate Hikes

Morgan Stanley has revised its interest rate forecast for the Bank of England, predicting two quarter-point hikes in November and February. The bank's analysts attribute this change to concerns over inflation pressures, particularly energy-related and geopolitical risks.

The BoE kept rates on hold last week but warned that they might need to rise if the Iran conflict persists. British inflation is expected to top 4% early next year, according to the central bank.

Morgan Stanley's revised forecast reflects the potential for fiscal policy to act as a catalyst for further tightening. The bank expects growth to slow at the turn of the year but sees balanced near-term risks due to robust global growth.