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Fed & Monetary Policy

Banks split on whether the Bank of England is forced into a November rate rise

Barclays and UBS expect a hike as soon as November; ING is sticking with a hold, and markets price an 80% chance of a move.

Assembled by Claude from 9 sources at 8 outlets · Friday, September 18, 2026, Evening edition, 5:16 PM EDT · no human byline

Disclosure. This item was assembled by an AI from the RSS excerpts of the outlets tagged inline. No human wrote or checked it before publication. Feed selection and categories are editorial choices by Teresa Lo. Nothing here is investment advice.

What happened

The Bank of England kept its benchmark interest rate unchanged at 3.75 percent on Thursday, as surging global energy costs fed through to prices english.news.cn. The BBC reported that rates were held but that the Bank signalled a rise if energy prices stay high, noting that the US Federal Reserve announced its first hike in three years on Wednesday and that the European Central Bank has raised rates twice since June bbc.co.uk.

Markets did not read the hold as the end of the argument. Reuters reported that markets see an 80% chance policymakers move in November, with Russ Mould of AJ Bell saying the Bank could be forced into a rate rise reuters.com. Bloomberg's framing was that UK retail sales rose as the Bank hinted at a hike bloomberg.com.

Where the forecasters disagree

The split among the banks is unusually clean. Barclays and UBS Global Research expect the Bank of England to raise rates as soon as November, citing mounting inflation risk finance.yahoo.com. ING is holding the other side: its call is a hold in November, described as a close one, with rates staying on hold into 2027 think.ing.com.

The data released this week cut towards the hawkish reading. UK retail sales rebounded in August, helped by online sales, as consumers shrugged off recently rising inflation wsj.com. The currency has moved the other way. Sterling is vulnerable to further losses after the Bank declined to endorse the tightening cycle that markets had already priced, leaving the gap between market pricing and the Bank's own guidance as the live risk poundsterlinglive.com.

What to watch

Alongside the rate decision, the Bank set out what it will do with its balance sheet. It said on 17 September that it will reduce its £488 billion portfolio of sovereign bonds acquired during quantitative easing reuters.com. That is a separate tightening channel from the policy rate, and it operates on the long end of the gilt curve rather than on the front end the November debate concerns.

Three markers follow. The first is the November meeting itself, where an 80% market-implied probability meets a divided set of bank forecasts reuters.comfinance.yahoo.comthink.ing.com. The second is energy prices, which the Bank named as the condition attached to a further rise bbc.co.uk. The third is whether consumer spending holds up, since August's rebound was recorded despite the inflation pickup rather than because it had faded wsj.com.

Sources

  1. reuters.com: Market Talk: Bank of England 'could be forced' into rate rise | Reuters (2026-09-18)
  2. finance.yahoo.com: Barclays, UBS back BoE hikes as inflation risks mount - Yahoo Finance (2026-09-18)
  3. think.ing.com: Why we've changed our Fed and ECB calls | articles | ING THINK (2026-09-18)
  4. bloomberg.com: UK Retail Sales Rise as Bank of England Hints at Rate Hike - Bloomberg.com (2026-09-18)
  5. english.news.cn: Economic Watch: Bank of England holds interest rate at 3.75 pct despite energy price hikes (2026-09-18)
  6. poundsterlinglive.com: Pound Sterling Risks Further Losses on Bank of England Caution (2026-09-18)
  7. reuters.com: Breakingviews - The BoE is backing the UK's debt, and that's fine | Reuters (2026-09-18)
  8. wsj.com: U.K. Retail Sales Climbed Despite Inflation Pickup (2026-09-18)
  9. bbc.co.uk: Interest rates held but Bank signals rise if energy prices stay high - BBC News (2026-09-18)