Reuters survey and a range of forecasters expect the Bank of England to hold
rates at the upcoming meeting, but headline risk of further tightening remains.
The Reuters survey found 25 economists expect at least one 25bp hike this year
while six expect one cut. Energy-driven "second‑round" inflation is the main
upside risk; several houses (BofA, Nomura) say sustained high energy prices
would justify further hikes, while Deutsche Bank, ING and Capital Economics say
softer May inflation buys policymakers time. Nomura flags a possible 25bp move
in July with easing only next year; Fitch and others also see potential rate
cuts resuming next year. Political and oil-price moves are key market
levers—Rabobank warns BoE caution plus a UK by-election could weaken sterling,
and TD Securities notes a sharp oil drop would reduce near-term hike odds.
Berenberg highlights a weaker UK labor market versus the eurozone, reducing
BoE’s inclination to tighten relative to the ECB.
