UBS Sees Shift in BoE Tone Towards Rate Hike as Energy Prices Rebound

The Bank of England's Monetary Policy Committee is expected to hold interest rates steady on Thursday, according to UBS economist Dean Turner.

This decision may seem like a hawkish hold, but Turner argues that it's actually a shift in tone that leaves a future rate rise looking more plausible than in the summer.

The odds of a near-term cut are fading, and the chance of an upcoming hike is becoming harder to ignore. This change in tone comes after a renewed climb in energy prices, which has pushed oil higher and revived inflation worries.

Turner notes that recent comments from policymakers suggest a growing risk that rising energy costs will feed into inflation expectations and wider pricing.