IMF Staff: BoE doesn’t need to raise interest rates this year

According to the International Monetary Fund (IMF) staff, the Bank of England (BoE) doesn’t need to raise rates this year, based on the current energy price outlook.

Additional comments

IMF staff see UK GDP growth in 2026 at +1.0% vs April estimate of +0.8%.

Expect UK inflation to peak at just below 4% at end-2026, return to 2% target by end-2027.

UK government must stay course on deficit reduction, given market pressures and greater implementation risks.

UK should ensure the cumulative impact of financial services regulatory changes does not weaken resilience.

Market reaction

No impact seen in the British Pound (GBP) after the IMF suggestions. As of writing, GBP/USD trades 0.23% higher to near 1.3355 after recovering early losses.