BUSINESS

Morgan Stanley changes BoE rate call, sees hikes in Nov and Feb

PUBLISHED Sep 25, 2026, 5:26 AM ET

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Morgan Stanley changes BoE rate call, sees hikes in Nov and Feb

Media Bias Meter

Sources: 28

Left 11%

Center 75%

Right 14%

Sources: 28

Morgan Stanley has adjusted its macroeconomic outlook for the Bank of England, forecasting two separate 25 basis point interest rate hikes in November and February. This revision departs from the firm's earlier expectation of a prolonged monetary policy pause. In a research report issued on Friday, analysts cited fiscal policy as a primary catalyst for potential monetary tightening. While economic growth is projected to moderate at the turn of the year, near-term risks remain balanced amid resilient global activity. The updated forecast follows the central bank's decision to keep borrowing costs unchanged while cautioning that persistent geopolitical conflicts, such as the war involving Iran, could necessitate further rate increases. Additionally, the Bank of England projects that British consumer price inflation will exceed 4% early next year.

By Neha R. | JQJO News

Timeline of Events

On September 25 2026 Morgan Stanley releases research note revising its Bank of England interest rate forecast.
On September 25 2026 Bank of England maintains interest rates steady during its recent policy meeting.
On November 1 2026 Projected timing for the first anticipated 25 basis point BoE rate hike.
On February 1 2027 Projected timing for the second anticipated 25 basis point BoE rate hike.
On January 1 2027 Anticipated timeframe when British inflation is projected by the BoE to surpass 4%.

News Intelligence

Immediate US impact: Indirect foreign exchange and treasury yield adjustments relative to UK monetary tightening.
Possible long-term US impact: Global central bank convergence on restrictive policy stances in response to persistent energy and commodity inflation pressures.
Most affected groups: UK borrowers, financial market analysts, institutional investors, and foreign exchange traders.
Reader priority: High for investors tracking global central bank monetary policy trajectories and macroeconomic indicators.

Media Bias

Articles Published:: 28
Right Leaning:: 4
Left Leaning:: 3
Neutral:: 21

Explain Framing

Left: leaning outlets emphasize the potential burdens high interest rates place on working households, mortgage holders, and consumers grappling with persistent inflation and fiscal tightening. Center: outlets provide objective reporting on institutional financial forecasts, central bank data projections, and macroeconomic catalysts without ideological commentary. Right: leaning outlets focus on fiscal discipline, the necessity of monetary tightening to combat inflation, and the broader economic stability impacts of central bank decisions.