Rising oil prices and firmer inflation expectations have pushed markets to increase bets on Bank of England tightening in 2026. Escalation of conflict in the Middle East has heightened concern that inflation may stay elevated, leading markets to fully price a 25bp Bank of England hike in November and to put the probability of a December move at 93%. Last week markets priced a cumulative 38bp of tightening in 2026.

2026-07-23

Rising oil prices and firmer inflation expectations have pushed markets to increase bets on Bank of England tightening in 2026. Escalation of conflict in the Middle East has heightened concern that inflation may stay elevated, leading markets to fully price a 25bp Bank of England hike in November and to put the probability of a December move at 93%. Last week markets priced a cumulative 38bp of tightening in 2026.