City searching for signals as Bank of England set to hike interest rates

The Bank of England is widely expected to raise its main interest rate from 3.75% to 4% on Thursday, as it seeks to curb inflation. Traders are watching the Bank’s explanation and voting record for clues about whether further increases are likely and how quickly they might come.

Economic signals are mixed, with a weaker jobs market, higher energy prices, volatile markets and stronger UK growth. Inflation reached 3.5% in the year to September, while the Bank has forecast it could exceed 4% in early 2027; market pricing implies nearly five rate rises over two years, though some analysts expect a more limited path. Forecasts for the committee vote vary, and several firms expect rates could reach 4.25% in February.