Investors do not fully price a quarter-point rate increase by the Bank of England (BoE) until its February 2027 meeting, according to market prices cited by LSEG data. Markets price 24.3 basis points of increases by the BoE’s Dec. 17 announcement and 36 basis points by the Feb. 4 announcement, while less than 4 basis points are priced for the Sept. 17 meeting, implying a 15% chance of a hike. That contrasts with 24 basis points priced for the European Central Bank’s Sept. 10 decision. British 10-year government bond yields fell 2 basis points to 5.01% on Thursday, after reaching a two-week low of 4.979% on Wednesday before rising later. Most economists polled by Reuters expect rates to remain at 3.75% this year, although financial markets have generally anticipated an increase. Governor Andrew Bailey said the difference reflected market pricing of the risk of an intensification of the U.S.-Iran war. British inflation rose to 2.9% in July as household energy bills increased, while the labour market remained muted. Investors are also watching Federal Reserve Chair Kevin Warsh’s message at Friday’s annual central-bank gathering in Jackson Hole, Wyoming.