Markets price three more BoE hikes, but analysts see a shallower path after move to 4%

The gap between futures pricing and analyst expectations is the key tension for UK assets. If the BoE delivers only one more hike, front-end gilt yields have room to fall and the curve could rally, which is why several analysts favour adding duration. For sterling, a shallower path than priced is a mild headwind on rate differentials. Analysts see little chance of the BoE out-tightening its peers, which limits the pound’s upside. Oil is the swing factor: a sustained rise on Iran escalation, as this weekend’s headlines threaten, would push the BoE back toward the market’s hawkish pricing.