Oil prices rise, investors raise expectations for the Bank of England to raise interest rates

Affected by the rising oil prices due to the tense situation between the United States and Iran, investors have raised their expectations for the Bank of England to raise interest rates in 2026. Bank of America strategists say that the UK is highly sensitive to global oil price shocks, leading investors to reprice their interest rate expectations. According to data from the London Stock Exchange Group, the market reflects an expectation for the Bank of England to raise interest rates by a total of 27 basis points this year, an increase from the 20 basis point expectation reflected a week ago.