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<\/a><\/p>\nWe\u2019ve looked at this from the European perspective<\/a>, where inflation is below target at rates at 2%, and the UK where inflation is still above target at rates at 3.75%.<\/a><\/p>\n Where Now for UK Interest Rates?<\/p>\n In the UK, Bank of England officials have yet to comment on the war. But futures markets have moved already, ruling out the expected interest rate cut in March. Just a month ago, the BoE\u2019s governor laughed off the prospect of a rate rise<\/a>, but a few weeks on, the idea isn\u2019t so outlandish.<\/p>\n The link to politics and the perennially-under-pressure Labour government is clear: falling interest rates and inflation, which Chancellor Rachel Reeves took credit for this week in the Spring Statement<\/a>, are needed to shore up consumer sentiment at a time when growth is hard to come by. After four rate cuts last year, lower mortgage rates were seen as a given in 2026, with knock-on effects on the housing market, retail and services.<\/p>\n Now that\u2019s all been put into question by the Middle East conflict. The UK\u2019s dependence on natural gas is particularly acute, which was last evident in winter 2022 when Russian supplies of gas stopped flowing into Europe.<\/p>\n Still, the demand for natural gas is falling as seasons change into spring and summer, so the real effect is likely to be hard to gauge for months. Much depends on the length of the current conflict, and the likely disruption to oil and gas supplies. At this point, the timeline is unclear. Andrew Bailey, in the last Bank of England press conference, stressed that the UK economy is getting better at dealing with external shocks such as war and pandemics. Let\u2019s hope so. We hear more from the BoE in two weeks, where the conflict will be front of mind for policymakers.<\/p>\n War took the attention away from Rachel Reeves, who delivered a \u201cnon event\u201d Spring Statement with no new personal finance details<\/a> for savers and investors.<\/p>\n The main takeaway from the Spring Statement is that economic growth will be sub-1% this year. Coupled with an energy shock to inflation, tepid growth this year could make the Bank of England\u2019s job much harder. The word \u201cstagflation\u201d may resurface again this year.<\/p>\n In the absence of much positive news, it\u2019s good to be able to celebrate International Women\u2019s Day with a look at the best female fund managers in Europe and UK.<\/a><\/p>\n James Gard, UK Editor<\/p>\n