“This widely-anticipated rate hold is the right call as the economy weakens and inflation risks begin to recede, while also offering some respite to households and firms grappling with elevated cost pressures.
“The strong backing for this decision confirms that policymakers are maintaining a cautious approach to setting policy as they wait for the dust to settle following the end of US–Iran hostilities, and given the potential for domestic political instability.
“UK monetary policy currently sits at a crossroads as while the US–Iran peace agreement has raised hopes that inflation could ease without further tightening, any return to hostilities could quickly tilt the balance back towards rate hikes.
“Rate setters are likely to opt for a prolonged policy pause, and while the next move is now more likely to be a cut than a hike, it is unlikely to come before next year given the heightened global turbulence.”
ENDS
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Chartered accountants are talented, ethical and committed professionals. ICAEW represents more than 211,600 members and students around the world. 81 of the top 100 global brands employ ICAEW Chartered Accountants.* 82% of FTSE 100 companies have an ICAEW member on their board.
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* includes parent companies. Source: ICAEW member data March 2026, Interbrand, Best Global Brands 2025.
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