HSBC Private Bank says Middle East conflict has led markets to largely rule out developed-market rate cuts in 2026; sees Fed standing pat this year; expects BANK OF ENGLAND to hike twice in 2026, 25 bps each, and ECB to hike three times; conflict raises inflation expectations and risk premia and weighs on UK and euro-area growth via energy shock.

2026-05-27

HSBC Private Bank says Middle East conflict has led markets to largely rule out developed-market rate cuts in 2026; sees Fed standing pat this year; expects BANK OF ENGLAND to hike twice in 2026, 25 bps each, and ECB to hike three times; conflict raises inflation expectations and risk premia and weighs on UK and euro-area growth via energy shock.