Pantheon Macro's Rob Wood says the Bank of England appears set to keep policy on
hold for an extended period, although most MPC members acknowledge a risk that
further rate hikes may be needed. Policymakers flagged the risk of oil prices
remaining elevated, and noted recent inflation has undershot expectations but
they see little evidence the Middle East conflict has caused a rapid demand
shock. Pantheon Macro expects Bank Rate to remain at 3.75% through end-2027;
unchanged guidance may disappoint markets after some had priced a chance of more
than two MPC votes for a hike at the July meeting.
