There are plausible scenarios in which the Middle East conflict prompts the Bank of England to delay interest rate cuts, cancel interest rate cuts or hike interest rates. As delay seems the most likely at the moment, we have changed our central forecast so that Bank Rate stays at 3.75% at the policy meeting on Thursday 19th March and at the meetings in April and June too. But if the new hump in inflation is looking short-lived, the Bank could still cut rates further, and perhaps eventually even to 3.00%.
We’ll be online for 20 minutes at 3pm GMT today to answer questions on how the conflict in the Middle East is influencing the UK economy and the path of interest rates. (Register here.)
And at 3pm GMT on Thursday 19th March we will be hosting a 20-minute online Drop-In to discuss the outlook for Bank of England, ECB and Fed policy. (Register here.)
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