UBS: Bank of England Terminal Rate Seen at 4.25% or Higher

According to Jin10, UBS strategists expect the Bank of England to raise rates again in February next year, taking the terminal rate to 4.25% or higher. After updating its inflation forecasts on Thursday and projecting inflation to reach around 5% by mid-2027, the Bank signaled that further rate hikes may be possible. UBS strategists said this implies at least one more 25-basis-point hike, while further increases cannot be ruled out. LSEG data showed markets currently fully price in a cumulative two rate hikes by mid-2027.