Danske Bank: Bank of England to Hike Key Rate in November

10:38 AM EDT, 10/30/2026 (MT Newswires) -- Danske Bank Research expects the Bank of England to increase its key rate by 25 basis points to 4% at its Nov. 5 monetary policy meeting in a bid to contain inflation risks. "At the beginning of the year, inflation was expected to fall back towards target, but it has since risen again, mainly because of higher energy prices following the war in the Middle East. Rate expectations have, like in other countries, shifted towards a new hiking cycle, which the BoE would enter from an already restrictive starting point, with the neutral rate estimated at around 3%," the research firm said Friday, noting the risk of second-round effects is higher as energy prices continue to rise over an extended period of time. While analysts did not rule out further rate hikes, they view the 100-basis-point tightening currently priced in by markets for 2027 as "excessive."