ING economists say the Bank of England's latest projections will show inflation
near 3% from H2 this year into early next year, a level they view as within the
Bank's tolerance. ING's base case is for the Bank to remain on hold through
2026, with policy easing delayed to the next cycle; ING currently forecasts two
rate cuts beginning in spring 2027 but says that path hinges on the autumn
budget containing no material fiscal stimulus. Sterling has come under pressure
as investors question how new Prime Minister Burnham will fund pledges to cap
transport fares and electricity bills, reviving concerns over public finances
after the 2022 Truss fiscal episode.
