Bank of England Poised to Hold Rates Amid Low Inflation Forecasts

According to ING's James Smith, the Bank of England is likely to keep interest rates on hold on July 30th. This decision would mark a prolonged pause in rate hikes that could extend through 2026.

The bank's new forecasts are expected to show UK inflation peaking near 3% later this year, which is below the 4% threshold that the Bank of England considers risky.

ING argues that oil and natural gas prices would need to rise significantly further to justify a rate hike. Specifically, they believe that oil prices would need to reach $120 per barrel and Dutch TTF natural gas prices would need to increase to around €80/MWh for inflation to exceed 4%.