Economists expect the Bank of England to adopt a hawkish tone but leave Bank
Rate unchanged at 3.75% at Thursday’s MPC meeting, despite renewed Middle East
hostilities and a fresh energy-price spike. Since the MPC’s June meeting the
collapse of a US–Iran truce has pushed oil back toward $100/bbl and European gas
to its highest levels since the conflict began; continued Gulf shipping
disruption could lift oil further. UK GDP rose 0.7% in the three months to May.
CPI has undershot forecasts for three months and fell to 2.6% in June; wage
growth is slowing and food inflation has eased, giving the MPC scope to hold
rates while warning it stands ready to tighten if energy shocks intensify or
become persistent.
