BOE Set for Prolonged Hold as Fears of Second-Round Inflation Effects Fade -- Market Talk

Dow Jones06-18

1429 GMT - The Bank of England's decision to hold its key rate at 3.75% points to a prolonged pause ahead, with a cut likely to be the next move, ING's James Smith says in a note. "There's nothing in today's decision that changes our mind that the next move is likely to be a rate cut in 2027," he says. It could take a lot for the BOE's five neutral-to-dovish policymakers to vote for a hike, as they appear confident that second-round inflation effects are unlikely, Smith says. If the U.S.-Iran ceasefire deal holds and energy prices stay at current levels, inflation will likely peak at 3.5% this year. That's below the 4% threshold BOE research suggested could trigger persistent price pressures, he says. (edward.frankl@wsj.com)

 

(END) Dow Jones Newswires

June 18, 2026 10:29 ET (14:29 GMT)

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