United Kingdom

Research evidence excerpt

United Kingdom

Allan Monks (44-20) 7134-8309 Europe Economic Research J P M O R G A Nallan.j.monks@jpmorgan.com

J.P. Morgan Securities plc 18 June 2026

Figure 1: Average earnings vs. other pay indicatorsUnited Kingdom

%oya, for AWE, ex. bonus

• Inflation surprises to the downside again, but still on 8 Indeed PAYE

track to rise above 3% in 4Q 6 private

• The unemployment rate also dropped unexpectedly, 4 DMP

with questions about the degree of labour market

slack 2 AWE

private

• MPC held rates as softer inflation buys it more time, 0

but the MPC retains a tightening bias -2

• We now look for a later BoE hike, in November Source:2019J.P. Morgan,2020 Indeed,2021ONS 2022 2023 2024 2025 2026

instead of July

If a range of other central banks tighten later this year due to

The BoE held rates this week, with Greene joining Pill in dis- a mix of resilience in the global growth outlook and inflation

senting hawkishly for a 25bp hike.The statement struck a bal- concerns, we doubt the BoE would sit and hold. For now and

anced tone, noting there were still material risks of second- in the near term, however, the BoE is signaling that it is not

round effects from higher inflation but also that a loosening prepared to act pre-emptively. We have hence shifted our call

labour market and weakening economy should counteract for a July hike back to November. In adopting this more

some of those effects. The statement maintained the same patient strategy, the BoE runs the risk of raising rates only

tightening bias as before, noting that the MPC “stands ready after clear signs of second-round effects have emerged. This

to act as necessary”. is something it has previously hinted would be unwise.

Most members simply wanted to wait longer before potential- Data releases and forecasts