BoE Expected to Keep Rates Steady Amid Iran War Risks

The Bank of England is widely expected to keep interest rates unchanged at 3.75%, as policymakers grapple with heightened uncertainty stemming from the ongoing Iran conflict and its inflationary impact. Governor Andrew Bailey and the Monetary Policy Committee are likely to resist any immediate policy shift, instead focusing on scenario analysis to assess how a prolonged energy shock could affect growth, jobs, and price stability. Rising oil and gas costs have disrupted the prior disinflation trend, with evidence mounting that higher input prices are feeding through to consumers. While markets have flirted with pricing in rate hikes, most economists expect a cautious hold, reflecting limited clarity on the duration of the shock and still-fragile labour market conditions. Communication will be key after March’s market volatility, with officials expected to strike a more balanced tone, acknowledging upside inflation risks while avoiding signals that could trigger another sharp repricing.

2 hours ago

ECB to Hold Rates in April Amid Iran War Impact

The European Central Bank is expected to hold interest rates steady at its April meeting, as investors adopt a wait-and-see approach to gauge the impact of the Iran war on inflation and economic growth. ECB President Christine Lagarde and board member Isabel Schnabel have signaled the bank will take its time before deciding on further tightening, with investors closely watching the press conference for any additional cues. Eurozone inflation accelerated to 2.6% in March, the highest since July 2024, driven by rising energy costs. Despite the cautious stance, markets are fully pricing in three ECB rate hikes in 2026, with the first potentially arriving as early as June.

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