Market participants have scaled back their expectations for interest rate increases from the Bank of England as energy prices decline. The prevailing market view now leans towards only a single 25-basis-point hike by the end of the year, marking the first time this expectation has been priced in since June 1st.

Data from the swaps market indicates that the Bank of England is now anticipated to raise interest rates by 35 basis points this year, a reduction from the previous forecast of 48 basis points.

This shift in sentiment coincides with a significant drop in oil prices, with Brent crude falling 3.6% to $87.14 per barrel.