Banco Santander analysts expect the Bank of England to keep rates unchanged next week while maintaining a vigilant, 'active hold' stance. They say current policy settings appear sufficiently tight to buy time to assess inflationary risk from the Middle East shock. Slowing inflation and a weak labour market limit near-term second-round price pressures, but a prolonged Iran conflict would raise upside inflation risk. Santander judges that if the crisis persists beyond summer, the BoE would face a

Banco Santander analysts expect the Bank of England to keep rates unchanged next week while maintaining a vigilant, 'active hold' stance. They say current policy settings appear sufficiently tight to buy time to assess inflationary risk from the Middle East shock. Slowing inflation and a weak labour market limit near-term second-round price pressures, but a prolonged Iran conflict would raise upside inflation risk. Santander judges that if the crisis persists beyond summer, the BoE would face a substantial risk of having to hike in September.