The Bank of England is now widely expected to keep interest rates unchanged for the rest of 2026, even as inflation concerns build again. A Reuters poll published on 21 April found that economists expect the Bank to leave Bank Rate at 3.75% at its 30 April meeting and to hold that level through year-end.

The reasoning is becoming clearer. According to Reuters, the recent jump in energy prices linked to the conflict involving Iran has pushed inflation worries higher, but many economists still think the Bank will avoid fresh rate increases because financial conditions have already tightened a great deal. That leaves policymakers trying to balance sticky inflation against weak growth and a softer labour market.

The poll also points to a more uncomfortable backdrop for the wider economy. Economists cut their median UK growth forecast for 2026 to 0.7%, while inflation is now expected to average 3.2% this year. That combination has revived talk of stagflation risk, where growth stays sluggish even as prices remain under pressure.