Standard Chartered predicts another BoE rate rise in February

Standard Chartered said it expects the Bank of England to raise its base rate by another 25 basis points at the February policy meeting. The forecast follows the central bank's decision on Thursday to lift rates to 4% from 3.75% after an 8-1 vote by the Monetary Policy Committee, with one dissenting member favoring a larger increase.

"The Bank of England (BoE) hiked its base rate by 25bps as expected, but the split on the Monetary Policy Committee (MPC) was more hawkish than we had expected," the bank wrote in a note.

The brokerage had previously anticipated that the BoE would keep rates steady after the November move. It added that future rate actions will be influenced by developments in the Middle East conflict, energy prices, and the outcome of recent U.S. midterm elections, which add to policy uncertainty.

"An escalation in the Middle East and an accompanying move higher in energy prices would increase the risk of an earlier BoE hike being delivered at the December policy meeting," Standard Chartered said.

The bank projects that monetary easing could resume in the fourth quarter of next year, followed by three additional 25-basis-point cuts across the first three quarters of 2028, while noting a broader margin of uncertainty tied to the duration of the Middle East-induced energy shock.