BoE talks a good hawkish game, but is unlikely to deliver
The Bank of England’s repeated pledge that it is “ready to act as necessary” (i.e. hike interest rates), alongside its decision to keep rates unchanged at 3.75%, was no surprise. But provided the US-Iran deal sticks, we doubt the Bank will follow in the footsteps of the ECB and the US Fed and raise rates. We think the most likely outcome is that the Bank keeps rates at 3.75% this year and cuts them to 3.00% in 2027.
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