Bank of England poised to raise rates but may push back on bets for more

The Bank of England is expected to lift its benchmark rate to 4.0% from 3.75% on Thursday, according to a Reuters poll reported by Business Recorder. The move would be its first increase since August 2023, as inflation has exceeded the central bank’s forecasts amid elevated energy prices.

Investors are also watching whether the bank will challenge market expectations for three to four further quarter-point increases in 2027, which would put the rate between 4.75% and 5.0%. The Monetary Policy Committee was split when it held rates in September, while the bank’s decision, updated economic forecasts and Governor Andrew Bailey’s comments are due on Thursday. A tax on banks is also part of the UK government’s recent budget measures.