Groupama AM sees Bank of England raising rates 25 bps in November 2026 on persistent energy-driven inflation risk
TLT•Groupama AM sees a more hawkish Bank of England
Groupama Asset Management flagged a more hawkish Bank of England stance despite holding the policy rate at 3.75% on a 6-3 vote.
Energy-price risks drove a higher inflation path, seen at 3.75% in Q4 2026, above the 3.2% projection in July. Inflation was seen slightly above 4% in Q1 2027, raising concern over second-round effects via wages and pricing.
Groupama now expects a precautionary 25-basis-point rate hike in November 2026, not the start of a sustained tightening cycle.
Quantitative tightening was set to continue, with balance-sheet runoff averaging GBP 46 billion a year, including GBP 20 billion of active sales.
