Lates News

According to the Financial Times, soaring oil prices will prompt the Bank of England to reopen its debate over whether it needs to raise interest rates before the end of the year. Policymakers are preparing to meet later this week. The Monetary Policy Committee will meet to discuss the key interest rate and the pace of shrinking its balance sheet. Meanwhile, a bond market sell-off is putting increasing pressure on Prime Minister Andy Burnham's government, with the Budget due to be announced on October 28. Market pricing shows less than a one-in-three chance of a rate hike at Thursday's September policy meeting. But renewed escalation of the Middle East war driving up energy prices, accelerating inflation and relatively solid UK GDP growth are set to intensify the debate within the Bank of England over how long the key interest rate can remain at 3.75%. Deutsche Bank economist Sanjay Raja said: "The Bank of England's patience may be running out, and the case for standing pat is slowly weakening."