Huw Pill, the Bank of England’s chief economist, said that, beyond the widely expected rate hike on December 17, new evidence could support further rate increases in 2027. However, there is no predetermined path for interest rates; it will depend on forthcoming data. Markets currently expect rates to rise to around 4.75% in 2027.

On November 5, the Bank of England raised its benchmark interest rate by 25 basis points to 4%, its first rate hike since August 2023. The Monetary Policy Committee voted 8–1 in favor, with Mann advocating a 50-basis-point increase. UK CPI inflation was 3.5% in September, and the Bank expects inflation to rise to around 5% by the middle of next year.

Pill warned of the need to guard against “second-round effects”—the pass-through of high energy costs to wages and prices. The Bank of England’s next rate-setting meeting is scheduled for December 17.

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