Key facts
- City analysts predict the Bank of England will raise interest rates to 4% from 3.75% at its next meeting.
- Markets are almost fully pricing in a rate hike by the Bank of England.
- Recent UK data, including hotter-than-expected September inflation and a pickup in wage growth, support a hike.
- European Central Bank President Christine Lagarde announced she would step down early.
- The Bank of Canada raised its key rate by 25 basis points to 2.5%.
Major central banks have paused interest rate hikes this week, but further increases are anticipated as inflation remains elevated and geopolitical tensions persist. The Federal Reserve and European Central Bank held rates steady, signaling ongoing efforts to combat inflation. The Bank of England is widely expected to implement its first rate hike of 2026 at its upcoming meeting, driven by recent data showing higher inflation and wage growth.