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Will the Bank of England Raise Interest Rates Above 4.0% Before the End of 2026?

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Last Updated 13 hours ago

This is Money“Economists at Santander, Schroders, Oxford Economics and Capital Economics are all forecasting that interest rates will stay at 3.75 per cent.”Jul 06, 2026

Thisismoney

James Smith“A Bank of England rate hike now looks unlikely barring a severe spike in energy prices through July, which isn’t our base case. We expect a prolonged pause and cuts to resume in 2027.”Jul 06, 2026

Morningstar

Andrew Wishart“The resulting slowdown in services price inflation and a favorable base effect from energy prices — a year on from the outbreak of the US-Iran war — risk the BoE undershooting its 2% target in 2027.”Jul 06, 2026

Morningstar

Edward Hutchings“If so, we will likely see not just one 0.25% hike, but potentially one or two more than this.”Jul 06, 2026

Morningstar

Gabriella Willis"We do think the risk of hikes has increased and will continue to rise the longer the Middle East conflict persists."Jul 06, 2026

Reuters

Susannah Streeter“Policymakers are staying cautious, anxious not to tip the economy into reverse but remaining wary about keeping a lid on unruly inflation.” Jul 06, 2026

Forbes

Luke Bartholomew“We think the BoE will be able to avoid the kind of monetary tightening that the European Central Bank has already started to deliver and that the Fed hinted at last night.”Jun 18, 2026

CNBC

Andrew Bailey"The Bank's job is to make sure that doesn't turn into sustained inflation above our 2% target."Jun 18, 2026

BBC News

Suren ThiruU.K. monetary policy now stands “at a crossroads.”Jun 18, 2026

CNBC

Tomasz Wieladek“Given the good news on inflation and the recent decline in oil prices, the MPC will likely conclude that no more hikes are necessary to stabilize inflation in the U.K.”Jul 06, 2026

Morningstar

Michael Field“The ripple effects from the conflict in Iran are still unfolding, and further inflationary pressures cannot be ruled out. As such, the Bank of England’s hand may be forced when it comes to raising interest rates.”Jul 06, 2026

Morningstar

Bruna Skarica"We still think that a central bank that was due to cut rates prior to the recent events... is not likely to pivot to hiking as early as the market is currently pricing."Jul 06, 2026

Reuters

Sanjay Raja"We stick to our call for no change in Bank Rate this year. But the odds of a rate rise are increasing, in our view. The duration of the energy shock is becoming non-negligible."Jul 06, 2026

Reuters

Tim Grimsditch“Another freeze at 3.75% will bring some stability for consumers, although it is unlikely to be the news prospective homebuyers were hoping for."Jul 06, 2026

Forbes

Bank of England“Monetary policy cannot affect global energy prices; our job is to make sure that higher inflation does not persist and have long-lasting effects on the economy. We are monitoring the situation very closely.”Jun 18, 2026