Sam Cartwright at Societe Generale argues recent easing in United Kingdom (UK) services inflation and labour market loosening support the Bank of England’s wait-and-see stance. The baseline view is Bank Rate stays at 3.75% through 2026 to restrain underlying inflation. Nonetheless, a further escalation of the US-Iran-related energy conflict and renewed price spikes could trigger up to two 25bp BoE hikes.
Bank Rate seen steady through 2026
“Overall, the continued easing in services inflation, alongside further signs of labour market loosening yesterday, supports the BoE’s wait-and-see approach.”
“Our baseline assumption is that Bank Rate remains…
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