Recent surges in global energy prices stemming from Middle East conflict have driven the Bank of England’s updated near-term CPI projections higher, with inflation now expected to reach around 3.7% in 2026 Q4 from the current 3.1% August reading. Higher crude, refined product, and wholesale gas prices are feeding directly into motor fuel and household utility bills via the Ofgem price cap, which is slated for further increases, while indirect effects on food and imported goods add to upside risks. Government mitigations, including last year’s Budget measures and a temporary VAT cut on electricity, are tempering the full pass-through. Market-implied odds place the strongest weight on the 3.5–3.9% outcome for the December 2026 year-over-year print, consistent with the central trajectory conditioned on prevailing energy futures and the Bank Rate held at 3.75%.