{"id":568761,"date":"2026-07-26T10:04:26","date_gmt":"2026-07-26T10:04:26","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/568761\/"},"modified":"2026-07-26T10:04:26","modified_gmt":"2026-07-26T10:04:26","slug":"interest-rates-expected-to-be-held-as-inflation-predicted-to-rise-again","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/568761\/","title":{"rendered":"Interest rates expected to be held as inflation predicted to rise again"},"content":{"rendered":"<p>Your support helps us to tell the story<\/p>\n<p class=\"sc-1uza6dc-0 iOIawn\">From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it&#8217;s investigating the financials of Elon Musk&#8217;s pro-Trump PAC or producing our latest documentary, &#8216;The A Word&#8217;, which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.<\/p>\n<p class=\"sc-1uza6dc-0 iOIawn\">At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.<\/p>\n<p class=\"sc-1uza6dc-0 iOIawn\">The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.<\/p>\n<p>Your support makes all the difference.Read more<\/p>\n<p>The <a href=\"https:\/\/www.independent.co.uk\/topic\/bank-of-england\" rel=\"nofollow noopener\" target=\"_blank\">Bank of England<\/a> is expected to hold <a href=\"https:\/\/www.independent.co.uk\/topic\/interest-rates\" rel=\"nofollow noopener\" target=\"_blank\">interest rates<\/a> again next week despite <a href=\"https:\/\/www.independent.co.uk\/news\/world\/middle-east\/iran-us-war-live-trump-houthis-oil-strait-hormuz-b3021660.html\" title=\"Iran-US war latest: Tehran summons Ukraine diplomats over Caspian Sea attack as Trump threatens to resume war\" rel=\"nofollow noopener\" target=\"_blank\">fresh uncertainty in the Middle East<\/a>.<\/p>\n<p>Economists have said they still expect a majority of the Bank\u2019s rate-setting committee to opt to keep the base interest rate at 3.75 per cent despite attacks in the region and US threats reigniting some concerns over <a href=\"https:\/\/www.independent.co.uk\/topic\/inflation\" rel=\"nofollow noopener\" target=\"_blank\">inflation<\/a>.<\/p>\n<p>A number of economists, including experts at <a href=\"https:\/\/www.independent.co.uk\/topic\/oxford-economics\" rel=\"nofollow noopener\" target=\"_blank\">Oxford Economics<\/a> and Nomura, have predicted another seven-to-two vote in favour of holding the current rate.<\/p>\n<p>The latest meeting of the <a href=\"https:\/\/www.independent.co.uk\/topic\/monetary-policy-committee\" rel=\"nofollow noopener\" target=\"_blank\">Monetary Policy Committee<\/a> (MPC) on Thursday July 30, which will also see it unveil fresh economic forecasts, come amid a backdrop of easing inflation in recent months.<\/p>\n<p>The Office for National Statistics (ONS) said earlier this week that UK consumer price index inflation eased back to a 15-month low in June, at 2.6 per cent.<\/p>\n<p>A slowdown in food and fuel prices helped provide an early positive signal for new Prime Minister Andy Burnham.<\/p>\n<p>The recent decline will have provided some relief to the MPC, which uses interest rates as a tool to control inflation.<\/p>\n<p>However, inflation is now widely expected to swing back higher and further away from the Bank\u2019s 2 per cent inflation target.<\/p>\n<p>The Bank has previously predicted that inflation will rise back to 3.25 per cent later this year as higher energy costs feed into household bills from July.<\/p>\n<p>Despite this, in recent weeks economists had largely predicted that interest rates would be kept stable at 3.75 per cent for the rest of the year.<\/p>\n<p>But the end of the ceasefire between US-Israeli and Iranian forces has increased uncertainty over the outlook, amid concerns this could drive inflation higher.<\/p>\n<p>Oil prices surged above 100 US dollars per barrel on Thursday for the first time since May, as attacks on shipping in the Red Sea and threats from President Trump pointed towards potential supply disruption in the region.<\/p>\n<p>Governor <a href=\"https:\/\/www.independent.co.uk\/topic\/andrew-bailey\" rel=\"nofollow noopener\" target=\"_blank\">Andrew Bailey<\/a> is likely to address how renewed hostilities have influenced the Bank\u2019s outlook for inflation and how the committee are approaching their decisions on rates.<\/p>\n<p>Thomas Pugh, chief economist at RSM UK, said he believes oil prices will \u201clargely\u201d steer the path of interest rates for the next year.<\/p>\n<p>\u201cIf they remain close to 100 dollars per barrel over the summer, a September rate hike would move firmly onto the table, with another in the winter likely,\u201d he said.<\/p>\n<p>\u201cHowever, if there is another peace deal and prices drop back a little, we think a weakening labour market and deteriorating economic outlook will keep the Bank on hold this year, before cutting three times in 2027.\u201d<\/p>\n<p>The intensifying conflict in the Middle East is also likely to impact the Bank\u2019s growth outlook, after GDP rebounded in May, although only rising by 0.1 per cent for the month.<\/p>\n<p>Rate-setters could be cautious to hike interest rates amid a backdrop of stagnant growth in the UK economy.<\/p>\n","protected":false},"excerpt":{"rendered":"Your support helps us to tell the story From reproductive rights to climate change to Big Tech, The&hellip;\n","protected":false},"author":2,"featured_media":568762,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-568761","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/568761","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=568761"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/568761\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/568762"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=568761"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=568761"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=568761"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}