Another Bank of England Rate Hike in December Possible, Berenberg Says

11:18 AM EST, 11/05/2026 (MT Newswires) -- Berenberg sees another rate hike from the Bank of England in December as possible, after its Monetary Policy Committee on Thursday voted 8-1 in favor of a 25 basis-point increase to its key rate to 4%. In a same-day note, the research firm highlighted that all nine of the committee members were in agreement about raising the interest rate, with one preferring a larger 50-basis-point hike to 4.25%. "The BoE now expects CPI inflation to rise to 4.9% in Q2 next year, and Governor Bailey and Clare Lombardelli argued that another increase in interest rates will be needed very soon unless energy prices fall," Berenberg said. "Note though that the BoE's forecast is based on energy price futures before the post-US midterms drop in energy prices, in which brent crude oil only fell to $95 per barrel by May, as Governor Bailey pointed out in the press conference. If the political reaction to the Republican defeat in the mid-terms results in a deescalation of the Middle East conflict that underpins a downtrend in energy prices, the BoE will likely hold rates in December." The research firm expects that inflation will not rise as sharply as the UK central bank projects, viewing the forecast as "too punchy." The BoE expects the annual inflation rate to reach 3.2% in 2026, 4.5% in 2027 and 2.4% in 2027, compared with Berenberg's respective forecasts of 3.1%, 2.9% and 1.7%.