BOE Could Hike Twice as Underlying Inflation Trends Gather Pace

0933 GMT - U.K. underling inflation pressures are gathering pace, strengthening the case for two Bank of England interest-rate increases over the coming months, Sanjay Raja at Deutsche Bank says in a note. Headline CPI inflation rose to 3.5% in September, while core inflation increased to 2.8% and services inflation to 3.7%. "Underlying inflation trends are pushing higher, with all our preferred core services metrics rising in September," Raja says. Food prices and index-linked increases are also likely to keep services inflation elevated into 2027, he says. And although there are few signs of second-round effects so far, continuing conflict in the Middle East could delay the return to lower inflation. "The case for insurance hikes, as we've argued, is gaining momentum," Raja says.