Iran Deal Takes BOE Rate Hike Off the Table -- Market Talk

Dow Jones
Jun 15

1147 GMT - If the peace agreement between the U.S. and Iran endures, the Bank of England should be able to avoid a rate hike this summer, James Smith at ING says in a note. With energy prices now falling, inflation is likely to stay below 4%--an important line in the sand for the central bank. "Markets now price just a 25% chance of a July hike and only one rate increase this year, down from a peak of three," Smith says. In addition, the risk of second-round inflation effects remains limited, he adds. "That's ultimately why we expect a return to rate cuts in 2027--something markets aren't currently pricing." Still, this could change if the U.S.-Iran deal unravels or fails to prevent another summer energy spike, Smith says. (don.forbes@wsj.com)

 

(END) Dow Jones Newswires

June 15, 2026 07:48 ET (11:48 GMT)

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