BoE to raise rates to 4% in November, but economists narrowly expect hold from there: Reuters poll
- Bank of England expected to hike rates to 4.0% in November after inflation stays hot—and it's not just for the weather.
- Waiting for 'second-round effects'? The Bank's governor hints at a festive surprise, but markets are already pricing in a train of quarter-point bumps.
- UK bonds yield at crisis-era levels, but the economy is still outrunning the G7—so why all the fuss?
- Economists flip-flop faster than a PM's cabinet reshuffle: last month they said 'hold,' this month they say 'hike.' Next month, who knows?
- Inflation forecasts climb like a caffeinated hedge fund manager, waving goodbye to the 2% target from the rearview mirror.
Brief Summary
The Bank of England is finally getting off the couch and raising rates for the first time in three years, in a collective 'we've been had' moment from economists who previously bet on a do-nothing November. With inflation at 3.1% and projected to double the target, the MPC is ready to pop the champagne—or at least cold-call everyone about higher mortgage payments. Markets are already pricing in four hikes by the end of next year, so don't be surprised if your lender sends a sympathy card with the next statement.
Why This Matters
For the average shoulder-shrugging citizen, this is the moment where 'cost of living crisis' becomes 'cost of everything crisis.' If the BoE follows through, expect mortgage rates and car loans to get comfy with 5% plus, while your savings account continues its sad little dance at near-zero. The government’s bond yields are already at historic highs, meaning the Treasury is burning cash faster than a hedge fund manager at a casino, and the October 28 budget is shaping up to be a comedy show where the punchline is a tax hike.