A Bank of England rate hike in July can’t be ruled out in World Economy News 04/06/2026 A June rate hike no longer looks likely Our view on the Bank of England has shifted over recent weeks. Six weeks ago, at the Bank’s April meeting, it felt as though officials were edging closer to a rate hike. While policymakers looked notably more reluctant to tighten policy than their counterparts at the European Central Bank, most were also working off a more benign energy scenario than our own base case at a time when sentiment around the Middle East crisis remained fragile. Back then, we thought a June hike had become marginally more likely than not. That’s no longer the case. Markets are right that the odds of a hike this month have faded. Yes, oil futures covering late 2026 and 2027 have indeed drifted higher. But that’s been offset by a $15/bbl fall in spot prices. Even more remarkably, natural gas prices have remained subdued. That matters for Britain, given how heavily it still relies on gas and LNG. Energy markets now sit somewhere between the Bank’s April “scenario A” and “scenario B”. Crucially, most officials judged at the time that neither scenario automatically warranted rate rises. In their view, simply not cutting rates – as likely would have happened absent the Iran war – already amounts to de facto tightening. We think it’s particularly significant that futures prices for natural gas delivery in 6-12 months have fallen back close to pre-war levels. If that holds, July’s 12% jump in household energy bills could be followed by an 8% fall in October. That would leave inflation peaking at around 3.7% in September before hovering near 3.5% into next spring – bearing in mind lower household energy bills into the winter will be offset by rising food inflation. And that matters because the Bank has effectively drawn a line in the sand at 4%. Last summer, officials argued that inflation is more likely to persist if headline CPI breaches that level for any sustained per