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 02 July 2026

United Kingdom It is surprising how relaxed he is about the risk of second

round effects. We expect measures of pricing intentions to

• Bailey continues to lean dovish, lowering odds of rate moderate following the drop in oil, but nevertheless to stay

hike this year high and remain consistent with sticky underlying inflation. If

these surveys - such as the PMI and DMP which are due

• But Mann remains hawkish, and sounds close to vot- tomorrow - are sending an accurate signal about future pric-

ing for a hike

ing pressures, that would imply some firming in the core CPI

• Pricing surveys due tomorrow are likely to moderate, data later this year which would challenge Bailey’s assump-

but remain high tions. We expect core inflation to rise to 2.8%oya over the

• Burnham delivers speech setting out plan for devolu- autumn, in line with the BoE’s projections, but upside surpris-

tion es relative to this would put more pressure on the MPC.

• Spending pressures set to remain high Bailey is also putting weight on the monetary tightening that

Andy Burnham this week gave a speech setting out his broad has already occurred, versus a counterfactual of cuts in the

vision for the UK if he becomes the next Prime Minister, as is absence of the Iran conflict. This week he argued that it was

now widely expected by mid-July. The main theme was an reasonable to think the BoE would have cut twice in the

intended transfer of power away from London and central absence of the conflict, although this is a shift from the “one

government towards other parts of the country. He also placed to two cuts” he suggested was reasonable when he spoke at a