Elevated energy prices stemming from the protracted Middle East conflict have shifted Bank of England policy expectations, with Brent crude reaching $106 per barrel and UK wholesale gas prices surging sharply since mid-2026. UK CPI inflation rose to 3.1% in August and is projected to climb toward 3.75% in 2026 Q4 and above 4% in early 2027, prompting the September MPC to note increased upside risks despite holding Bank Rate at 3.75% on a 6-3 vote. This backdrop has driven market-implied odds to 84.5% for a 25 basis point hike at the November 5 meeting, reflecting trader consensus on the need to counter second-round effects amid resilient activity data.