Bank of England: Hike it or not

We expect the MPC to hike 25bp to 4.00% in a 7-2 vote. Persistent energy inflation is forcing its hand despite limited second-round effects. We lift our 2027 inflation forecast to 3.9% and add another 25bp hike in February, taking Bank Rate to 4.25%. Further moves hinge largely on the Middle East. What I changed: Prioritized the rate call, inflation forecast and Middle East risk, while cutting repetition and preserving the causal link from energy inflation to the additional hike.