BoE ready to raise rates, but not as far as investors fear

We have revised up our Bank of England forecasts and now expect interest rates to be raised from 3.75% to 4.00% at the next policy meeting in November and to 4.25% in February. Our previous forecast was that the Bank wouldn’t raise rates at all. That said, we still believe the market has gone too far pricing in rates rising to 4.75%. And we suspect the Bank will cut interest rates late in 2027 or in 2028.

We’ll be discussing the differences in the outlook for BoE, Fed and ECB policy in a 20-minute online briefing at 3pm BST today. (Register here.)