UBS Sees BoE Rate Reaching 4.25%, Says Further Hikes Not Ruled Out
UBS strategists expect one more Bank of England rate increase in February. The central bank did not rule out further tightening as inflation is seen near 5% by mid-2027.
- published on Newsmetry
- original source published
the same feed is available to bots and dashboards through the api. connect the api →
what happened
UBS strategists expect the Bank of England to lift its policy rate once more in February, to 4.25%. This week the central bank raised rates to 4.0%, as widely anticipated, but signalled that further increases are possible after updating its UK inflation forecast, which now sees inflation reaching around 5% by mid-2027.
UBS analysts say the outcome of the meeting points to at least one more 25 basis-point hike. They added that larger tightening cannot be excluded. LSEG data show markets already fully price in two BoE rate increases by mid-2027.
The information comes from Market Talk.
why it matters
For markets, this suggests the tightening cycle could run longer. Expectations of higher rates typically support the pound, while UK government bonds come under pressure because rising yields push their prices down. The roughly 5% inflation outlook also matters for longer-term yield expectations.
market impact
Pound: higher rate expectations support GBP/USD; UK gilts under pressure as yields rise
- GBP/USD pressure up — expectations of further Bank of England rate hikes support the pound
- UK gilts pressure down — higher rate expectations push yields up and gilt prices down
tags
instruments
sources
- UBS Expects BOE Terminal Rate at 4.25%, But Could be Higher — Market Talk, 6 November 2026 at 11:24 UTC
prepared by the newsmetry newsroom with ai assistance from the sources listed below. not investment advice.
alerts on your topics, the morning digest and the api — in your account.
get stories in real time ↗