Morgan Stanley Sees Two BoE Rate Hikes Amid Global Growth Concerns

Morgan Stanley has updated its interest rate call for the Bank of England (BoE), predicting two quarter-point hikes in November and February. This change comes after the BoE kept rates on hold last week, warning that they might need to increase them if the Iran war drags on.

The analysts at Morgan Stanley believe fiscal policy is the key catalyst for more tightening, with a slowdown in growth expected at the turn of the year. However, despite this, they see balanced near-term risks due to the robustness of global growth.

The BoE had previously predicted that British inflation would top 4% early next year, and Morgan Stanley's new call reflects this potential increase in interest rates.