BOE and Riksbank Signal Hawkish Turn as Oil Prices Stay Elevated

Bank of England policymaker Clare Lombardelli flagged rising odds of an interest rate hike, pointing to oil prices that have stayed elevated. Separately, Sweden's Riksbank held its benchmark rate at 1.75% but signaled it expects to raise rates later this year. The two statements, arriving within the same window, point to a broader shift among European central banks toward tightening policy in response to energy-driven inflation pressure. That shift echoes comments from the ECB's Isabel Schnabel, who has said the energy shock tied to the Iran war is proving lasting and is widening across the economy. What remains unresolved is whether oil prices stay elevated long enough to force an actual rate increase, or whether they ease before either central bank needs to act.