Bank of England hike odds near 98% ahead of Thursday

London's rates market has already written the Thursday decision. A Bank of England hike of 25 basis points is priced as near-certain on Polymarket, while Reuters-polled economists expect Bank Rate to move from 3.75% to 4.0% for the first increase since August 2023 after a sticky CPI miss.

What happened

Investing.com's Reuters dispatch said September CPI ran at 3.5%, above the Bank's July forecast of 3.0%, and that a Reuters poll points to a 7-2 vote for a hike. The decision is due at 12:00 GMT Thursday, with Governor Andrew Bailey's press conference at 12:30 GMT, leaving a short window for markets to reprice guidance after the vote count.

Polymarket's November decision event showed the "increases by 25 bps" contract near 98.45% Yes against 1.55% No in the early November 4 gamma snapshot, with roughly $10.2 thousand of liquidity on that outcome, about $52.2 thousand of event liquidity and roughly $173 thousand of volume on the +25 bps line. The event's listed end is 2026-11-05T23:59Z, matching the meeting week. That book is thinner than the large Fed contracts but still deep enough to treat the modal outcome as locked into Thursday.

Guidance after the vote may matter more than the hike itself. Economists flagged that the Bank could push back on bets for more tightening even while delivering the first step, a classic Bailey risk for sterling and gilt forwards.

Services inflation and wage persistence remain the domestic justification, while energy and imported goods still feed the CPI overshoot versus the July path.

Why it matters

Sticky UK inflation is the fundamental driver behind a Bank of England hike. Our earlier UK inflation 3.5% report already framed the fuel and services mix that forced markets to reprice a November move; Thursday is the policy confirmation of that tape rather than a fresh shock.

Global peers keep the comparison tight. Fed December hike odds still treat another U.S. 25 basis-point step as the modal outcome into December, so Threadneedle Street would be joining a late-cycle tightening club rather than isolating the UK if it delivers as priced. That cross-Atlantic alignment matters for sterling crosses because traders often fade UK-only surprises when the Fed path is already pointing the same way.

Prediction-market pricing leaves little room for a hold surprise, which means the tradable event is the statement tone, the vote split and any forward guidance that trims December and February hike odds after the print. A dovish hike can still knock sterling even when the level of Bank Rate rises.

Gilt front-end and sterling crosses will therefore trade the press conference as heavily as the decision line itself once the 4.0% rate is locked in. Curve steepeners and flatteners both remain live depending on whether Bailey frames the step as insurance or a short sequence.

Mortgage and savings pass-through will follow within days, turning a widely expected policy step into a cash-flow event for households already facing elevated fixed-rate resets.

What's next

Focus on the 12:00 GMT decision and Bailey's 12:30 GMT remarks for clues on further hikes and any dissent split. Reuters' preview via Investing.com outlines the CPI miss and 7-2 poll expectations.

If the Bank delivers but sounds one-and-done, markets will fade a second move even after pricing this Bank of England hike at near 98% on Polymarket's +25 bps contract.

A hawkish 7-2 or wider majority with open-ended language would instead keep December contracts bid and extend the sterling support that usually accompanies a first hike after a long pause.

The call

We say the Bank of England will raise Bank Rate by 25 basis points at the November 2026 meeting. Polymarket priced the +25 bps outcome near 98% at 08:25 MSK on Nov. 4. The decision is due Thursday; settlement follows the official Bank Rate announcement. Direction is the base case; the open question is guidance after the vote.