WS #16924
The Bank of England hiked interest rates by 25 basis points to 4%, with Governor Andrew Bailey warning that further hikes are likely unless the Middle East conflict resolves. The central bank's updated forecast projects UK CPI peaking at 5% in Q2 2027, driven by energy prices. This hawkish stance dampens bullish expectations for rate cuts and pressures UK growth stocks and global risk assets sensitive to higher borrowing costs.
Bank of England Hawkish Pivot
The Bank of England hiked interest rates by 25 basis points to 4%, with Governor Andrew Bailey warning that further hikes are likely unless the Middle East conflict resolves. The central bank's updated forecast projects UK CPI peaking at 5% in Q2 2027, driven by energy prices. This hawkish stance dampens bullish expectations for rate cuts and pressures UK growth stocks and global risk assets sensitive to higher borrowing costs.