CBI responds to interest rates hold (July 2026)

Alpesh Paleja, CBI Deputy Chief Economist, said:

“The Bank of England has kept interest rates unchanged amid renewed uncertainty over global price pressures. Since the MPC’s last meeting, tensions in the Middle East have become more febrile. Energy prices have spiked, reigniting concerns over a more lasting impact on inflation.

“One silver lining is that the Bank is starting from a relatively more favourable position. Prior to the latest escalation, energy prices had fallen back significantly. Inflation and wage data have also come in lower than previously expected. Moreover, a looser labour market should also help limit the pass-through into broader domestic price pressures.

“These competing influences on inflation mean that interest rates will likely remain on hold for now. Globally, much depends on the duration and intensity of the renewed energy price shock. Closer to home, the Bank may also wait for greater clarity on the fiscal outlook as we head towards the new Chancellor’s first Budget in the Autumn.”