{"id":738313,"date":"2026-06-15T15:34:09","date_gmt":"2026-06-15T15:34:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/738313\/"},"modified":"2026-06-15T15:34:09","modified_gmt":"2026-06-15T15:34:09","slug":"us-and-uk-central-banks-expected-to-keep-interest-rates-on-hold-amid-iran-peace-deal-interest-rates","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/738313\/","title":{"rendered":"US and UK central banks expected to keep interest rates on hold amid Iran peace deal | Interest rates"},"content":{"rendered":"

Central banks in the US and UK are expected to leave interest rates on hold this week as the peace deal in the Middle East is expected to ease inflationary pressures.<\/p>\n

The US Federal Reserve<\/a> is expected to hold its benchmark interest rate at a range of 3.5% to 3.75% on Thursday, in what will be the first policy decision under new Fed chair \u2013 and Donald Trump\u2019s pick \u2013 Kevin Warsh.<\/p>\n

Investors will be closing watching Warsh\u2019s comments in the press conference after the decision, for clues on his views on the likely path for US inflation and the economy more widely. Inflation in the world\u2019s largest economy has jumped from 2.4% in February to a three-year high of 4.2% in May<\/a>.<\/p>\n

Before Trump struck a fresh deal with Iran<\/a> at the weekend, Warsh was under mounting pressure to raise interest rates \u2013 against the president\u2019s wishes \u2013 in response to rising prices, but he is expected to say that the opening of the strait of Hormuz will ease inflation over the rest of the year.<\/p>\n

The Bank of England<\/a> (BoE) is expected to hold interest rates at 3.75% despite UK inflation running at 2.8%, above its 2% target.<\/p>\n

Analysts said most of the Bank\u2019s nine-member monetary policy committee will adopt a \u201cwait-and-see\u201d approach when they meet on Thursday before reacting to the deal, which triggered an immediate drop in oil prices<\/a>. Financial markets are now still pricing in one more UK rate rise this year, in December.<\/p>\n

James Smith, an economist at ING, said it was uncertain how long a peace deal would hold. \u201cBut if the deal endures and oil starts flowing again, UK inflation would likely stay below 4% and enable the Bank of England to avoid a rate hike this summer,\u201d he added.<\/p>\n

Last week the European Central Bank (ECB) raised interest rates from 2% to 2.25% after eurozone consumer price inflation rose to 3.2% in May 2026, from 3% in April.<\/p>\n

The ECB president, Christine Lagarde, said on Monday that higher energy prices were starting to feed through to other parts of the economy.<\/p>\n

\u201cIndirect effects of inflation, we have absolutely started to see that more or less everywhere in recent weeks,\u201d Lagarde told French radio.<\/p>\n

\u201cWhen we start to feel second-round effects bubble up \u2013 which are risks of wage increases in particular \u2013 we necessarily have to take measures,\u201d she added.<\/p>\n

Officials are known to be concerned that the conflict in the Middle East has already encouraged aggressive wage bargaining, forcing manufacturers and retailers to push through price increases into the summer and autumn to maintain profit levels. Like the BoE and the Fed, the ECB\u2019s inflation target is 2%<\/p>\n

The Bank of England governor, Andrew Bailey said last week that there was less pressure on the monetary policy committee to raise borrowing costs after commercial lenders raised rates on loans and mortgages.<\/p>\n","protected":false},"excerpt":{"rendered":"Central banks in the US and UK are expected to leave interest rates on hold this week as…\n","protected":false},"author":2,"featured_media":509883,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,164],"class_list":["post-738313","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/738313","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=738313"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/738313\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/509883"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=738313"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=738313"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=738313"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}