Bank of England Expected to Hold Interest Rates Amid Oil Price Surge
The Bank of England is widely expected to keep interest rates unchanged at 3.75% in a split vote on Thursday, despite a surge in oil prices to nearly $100 per barrel due to renewed Middle East conflict. Analysts predict that two Monetary Policy Committee members, Huw Pill and Megan Greene, may vote for a hike, with potential dissent from Catherine Mann and Clare Lombardelli. UK inflation slowed to 2.6% in June, but economists forecast it will rise above 3% in the second half of the year due to energy price cap resets, potentially reaching 3.5% or even 4%. Morgan Stanley projects rates will remain on hold for the rest of the year, citing weak wage growth and labor market conditions. BNP Paribas is more cautious, predicting three members could vote for a hike and one rate increase in September to pre-empt wage demands in early 2027.
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