UBS Sees Cautious Tone from Bank of England Amid Energy Price Pressures

UBS is forecasting that the Bank of England will keep interest rates at 3.75% when it meets on September 17, in line with market expectations.

The bank's economists believe the Monetary Policy Committee will have a similar vote split as in July, with Huw Pill, Megan Greene, and Catherine Mann pushing for a quarter-point hike.

However, UBS expects the Committee to strike a more cautious tone due to rising energy prices and escalating tensions in the Middle East.

The bank notes that policymakers are being pulled in two directions by stable wage and inflation expectations, alongside elevated energy costs.