GBAF Logo
Investors ramp up bets on Bank of England rate hikes - Finance news and analysis from Global Banking & Finance Review
Finance

Investors ramp up bets on Bank of England rate hikes

Published by Global Banking & Finance Review

Posted on May 12, 2026

1 min read

· Last updated: May 12, 2026

Add as preferred source on Google
Finance Banking Markets

Investors Increase Wagers on Bank of England Rate Hikes Amid Global Tensions

Market Reactions and Rate Hike Expectations

Investor Sentiment and Global Events

LONDON, May 12 (Reuters) - Investors increased their bets on the Bank of England raising rates in the coming months as global markets responded to the latest increase in tensions in the Strait of Hormuz and as Prime Minister Keir Starmer was battling to stay in power.

Bank of England Rate Futures

UK rate futures on Tuesday pointed to around 68 basis points of BoE policy tightening by December - approaching a full pricing of three quarter-point rate hikes - up from about 56 bps on Monday.

Comparisons with European Central Bank Policy

Investors were pricing three European Central Bank rate hikes this year.

(Writing by William Schomberg; editing by Sarah Young)

Key Takeaways

  • UK rate futures now reflect nearly three quarter‑point Bank Rate hikes by year‑end, up from around 56 bps on May 11 and 73–75 bps late April amid oil‑related inflation pressures (tradingview.com)
  • Heightened geopolitical risks in the Strait of Hormuz and political fragility around Prime Minister Keir Starmer are amplifying expectations for tighter UK monetary policy (tradingview.com)
  • Investors are also pricing in three ECB rate hikes this year, as energy price shocks and inflationary pressures extend across Europe (investing.com)

References

Frequently Asked Questions

Why are investors increasing bets on Bank of England rate hikes?
Investors are reacting to global tensions in the Strait of Hormuz and UK political uncertainty, which have raised the likelihood of rate hikes.
How many rate hikes are investors expecting from the Bank of England?
UK rate futures suggest nearly three quarter-point Bank of England rate hikes by December.
What policy tightening is currently priced into UK rate futures?
UK rate futures indicate around 68 basis points of policy tightening by December.
How do expectations for Bank of England hikes compare to the European Central Bank?
Investors are also pricing in three European Central Bank rate hikes this year.

Tags

Related Articles

Image for EU targets social media to protect children, von der Leyen says

EU targets social media to protect children, von der Leyen says

Image for UK borrowing costs march higher, sterling slumps as Starmer's future in doubt

UK borrowing costs march higher, sterling slumps as Starmer's future in doubt

Image for European equities fall as fragile Mideast ceasefire dents risk sentiment

European equities fall as fragile Mideast ceasefire dents risk sentiment

Image for Sterling drops as markets watch UK politics, PM Starmer's future

Sterling drops as markets watch UK politics, PM Starmer's future

Image for World markets feel the strain as US–Iran war grinds on

World markets feel the strain as US–Iran war grinds on

Image for KBC's profit misses market forecast as it builds buffer against war hit

KBC's profit misses market forecast as it builds buffer against war hit

More from Finance

Explore more articles in the Finance category

Image for All access roads to Brussels airport are closed due to gas leak
All access roads to Brussels airport are closed due to gas leak
Image for Germany's finance watchdog to make targeted inspections amid 'substantial' AI risks
Germany's finance watchdog to make targeted inspections amid 'substantial' AI risks
Image for Meta loses court fight over compensation to Italian publishers
Meta loses court fight over compensation to Italian publishers
Image for Sweden's EQT tables $12.7 billion proposal to take UK's Intertek private
Sweden's EQT tables $12.7 billion proposal to take UK's Intertek private
Image for UK's On the Beach reinstates profit guidance below analysts' view as Iran war weighs
UK's On the Beach reinstates profit guidance below analysts' view as Iran war weighs
Image for UK's Marston's half-year profit rises on cost control, reiterates outlook
UK's Marston's half-year profit rises on cost control, reiterates outlook
Image for UK's Picton says LondonMetric, Schroders agree to $546 million takeover offer
UK's Picton says LondonMetric, Schroders agree to $546 million takeover offer
Image for EU reaches provisional deal to address shortage of essential medicines
EU reaches provisional deal to address shortage of essential medicines
Image for DHL signs sustainable aviation fuel supply deal with SAF One in Bahrain
DHL signs sustainable aviation fuel supply deal with SAF One in Bahrain
Image for Finland's Outokumpu core earnings miss market forecast in Q1
Finland's Outokumpu core earnings miss market forecast in Q1
Image for Vodafone starts a 'new chapter' as it forecasts earnings growth
Vodafone starts a 'new chapter' as it forecasts earnings growth
Image for Satellite firm SES's revenue jumps 80% as airplane connectivity gains momentum
Satellite firm SES's revenue jumps 80% as airplane connectivity gains momentum
View All Finance Posts