30.04.202605:56:11UTC+00BoE Expected to Keep Rates Steady Amid Iran War Risks

The Bank of England is widely expected to leave interest rates unchanged at 3.75%, as policymakers confront heightened uncertainty arising from the ongoing Iran conflict and its inflationary effects. Governor Andrew Bailey and the Monetary Policy Committee are likely to avoid any immediate change in policy, instead prioritising scenario analysis to gauge how a prolonged energy shock could influence growth, employment, and price stability.

Rising oil and gas prices have interrupted the previous disinflationary trend, with growing evidence that higher input costs are being passed on to consumers. Although markets have intermittently priced in further rate hikes, most economists anticipate a cautious pause, citing limited visibility on the duration of the shock and still-fragile labour market conditions.

Communication will be crucial following the market volatility seen in March. Officials are expected to adopt a more balanced tone, acknowledging upside risks to inflation while avoiding signals that might prompt another sharp market repricing.