Survey shows: Most economists expect the Bank of England to maintain interest rates at 3.75% for the rest of the year.

1. The latest survey shows that the vast majority of economists expect the Bank of England to keep its benchmark interest rate unchanged at 3.75% for the remainder of 2026, with this expectation remaining largely unchanged since the outbreak of the Iran war at the end of February. Among the economists surveyed, nearly 90% anticipate that the Monetary Policy Committee will hold rates steady this year, 9% expect a rate hike before the end of the year, and 1% forecast a rate cut. 2. The UK economy remains generally resilient, with little evidence that rising energy prices have spread to the broader economy, providing the central bank with room to maintain a wait-and-see stance. However, at the July Monetary Policy Committee meeting, three members voted to raise interest rates immediately to 4.0%, up from two who supported a hike at the previous meeting. 3. Official data due to be released this Wednesday is expected to show that UK inflation in July may have risen to 2.9% from 2.6% in June, further above the Bank of England's 2% target. The central bank’s latest quarterly forecast projects inflation will exceed 3% later this year. However, economists note that labour market data shows both hiring and wage growth are relatively weak and within a range acceptable to policymakers, providing justification to maintain the current stance for now. 4. Brent crude oil is currently around $91.88 per barrel. With the Strait of Hormuz still closed, oil prices remain approximately 25% higher than before the outbreak of the war. Nevertheless, just over half of the economists surveyed expect the Bank of England to cut rates at least once by mid-2027. The survey also shows that UK economic growth is projected to be 1.1% in 2026 and 1.2% in 2027, followed by an acceleration to 1.5% in 2028.