Bank Of England Hikes Rates Amidst Middle East Conflict – Wealth Managers React

Amanda Cheesley

6 November 2026

The (parent of Brown Shipley), said. “For now, this looks more like a risk-management hike than the start of an aggressive tightening cycle. The Bank is acting now to reduce the risk that higher energy costs feed into wages, services prices and inflation expectations. The immediate combination of higher energy prices, above-target inflation and tighter monetary policy is challenging for gilts and interest-rate-sensitive sectors. For sterling, what matters from here is whether the Bank ultimately needs to tighten much more than other major central banks, an unlikely scenario at this stage.

“We think it probable that market pricing for a further three hikes might overstate the case for further tightening, especially given energy market strains have eased a little since Tuesday and the US midterm results,” Felix Feather, economist, at Aberdeen, said. “But we do see at least one further hike, probably coming in February next year. That relatively shallow tightening cycle could leave some space for UK assets including gilts to rally. However, a return to US strikes against Iran or a rise in domestic political uncertainty poses downside risk to this view.”

“For portfolios, the rise in yields continues to leave gilts looking attractive, particularly around the seven to eight-year area, while we see merit in gradually extending duration further along the curve. This remains consistent with our view that a significant amount of the UK’s fiscal and supply-related risk is already reflected in gilt valuations,” Jon Cunliffe, head of investment office at , said.