Persistent Middle East conflict has driven sharp rises in energy prices, pushing UK CPI inflation to 3.1% in August and prompting Bank of England staff to revise projections upward to around 3¾% for 2026 Q4 and slightly above 4% in early 2027. At its September 2026 meeting, the MPC held Bank Rate at 3.75% on a 6-3 vote, but three members favored an immediate 25 basis point hike, with minutes highlighting growing risks of second-round effects. Major banks including Goldman Sachs and Citigroup now forecast at least one rate increase by year-end, while market pricing embeds roughly 47 basis points of tightening by December. With the next MPC decision due November 5 and inflation data continuing to reflect energy pass-through, traders assign an 85.5% implied probability to a Bank Rate hike occurring sometime in 2026.