BoE Hold Expected, Energy Revives Hike Bets

UK CPI rose 3.1% in August, the highest since February. The Bank of England meets at noon Thursday with Bank Rate expected to stay at 3.75%. Core inflation held at 2.6% for a fourth month. Gilt yields eased to around 5.28% from last week's 5.44% peak. The FTSE 100 was largely flat ahead of the decision, oil prices dipped in Asian trading, and the Federal Reserve's recent US rate rise spilled over into global markets. Analysts now put the chance of a hike at about 20%, down from 40% earlier. Investors have trimmed the path to as many as four increases by the end of 2025, from five. Some analysts foresee an Ofgem price-cap rise of up to 25% in January, with inflation able to approach 4% by year-end. Coverage agrees on the August CPI figures and the expected hold. No factual dispute is recorded on those points. What remains unresolved is whether energy costs will push later tightening.