BoE preview: Holding and hoping

Research evidence excerpt

BoE preview: Holding and hoping

Global Markets Research

23 July 2026UK Insights

Economics - EMEA/Europe

BoE preview: Holding and hoping ResearchEuropean EconomicsAnalysts

George Buckley - NIplc

• WeexpecttheBankofEnglandtoleaveratesonholdatitsmeetingnextweek george.buckley@nomura.com

(announcement:Thursday30July,midday).Dataprovidenoconclusiveevidenceof +44 (0) 20 7102 1800

second-roundinflationeffects,orthatahikeisneeded.MostMPCmembersare Andrzej Szczepaniak - NIplc

thereforelikelytobecontenttowaitandseehowtheIranwar,energypricesandthe andrzej.szczepaniak@nomura.com

feed-throughtoinflationdevelopfromherebeforepullingthetriggerontighterpolicy, +44 (0) 20 7102 3167

shoulditbeneeded.Therefore,weexpectanother7-2voteinfavourofratesonhold. Josie Anderson - NIplc

josie.anderson@nomura.com

• WhileourviewremainsfornohikesfromtheBankofEngland,weareacutelyaware +44 (0) 20 7102 4284

thatweremovedtheonlyratehikefromourviewatatimewhenenergypriceswere

falling.Nowthatenergypricesarerisingsharplyonceagain,sotooaretherisksthat

theMPCwillbeforcedintoahiketocountereitheractualsecond-roundeffects,or

possiblyeventherisksofthemdeveloping.

Monetary policy and oil prices

Once again, the rise in energy prices since the start of this month has injected more

uncertainty into the outlook for global monetary policy. At $97/bbl oil prices are currently

38% above where they were just before Iran war began, and over 60% higher than at the

start of the year. The last time we were at current levels was end May/early June. Gas

prices are up even more sharply and now at similar levels to their mid-March peaks

(though, unlike oil, they remain substantially below levels in 2022).

Fig. 1: UK rates market sensitivities to oil prices Fig. 2: Core services inflation has slowed in recent months