Franklin Templeton strategist Michael Browne said markets have effectively done much of the tightening for the 2026 MPC: elevated UK gilt yields and higher borrowing costs have tightened financial conditions without Bank of England intervention. He said that is unlikely to change as the Iran conflict lifts household energy bills, a new government’s fiscal plans remain uncertain and drought boosts food prices, keeping upside inflation risk. Markets are therefore likely to maintain tighter financi

Franklin Templeton strategist Michael Browne said markets have effectively done much of the tightening for the 2026 MPC: elevated UK gilt yields and higher borrowing costs have tightened financial conditions without Bank of England intervention. He said that is unlikely to change as the Iran conflict lifts household energy bills, a new government’s fiscal plans remain uncertain and drought boosts food prices, keeping upside inflation risk. Markets are therefore likely to maintain tighter financial conditions. Investors now price at least one Bank of England hike before year-end and another by next spring, especially as expectations of further U.S. tightening build; Browne added the MPC is being pushed by shifting conditions rather than managing a delicate balance.