JPMorgan predicts the Bank of England will raise interest rates once in April and once in July.

SighingCashier · 2026-03-20T13:32:48+00:00

The market shows diverging predictions on UK monetary policy. JPMorgan predicts the Bank of England will raise rates by 0.25% in April and July respectively, primarily due to inflation risks from higher oil prices driven by Middle East tensions. OCBC believes geopolitical developments will limit rate-cut room, maintaining rates unchanged. The Bank of England kept rates at 3.75% and hinted it could raise rates if necessary.

SighingCashier

2026-03-20 13:32:48

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The market is divided on the UK monetary policy outlook. According to JPMorgan’s latest forecast, the Bank of England will raise interest rates twice in April and July, each by 0.25 percentage points, after initially expecting rates to remain unchanged this year. The main reason is that Middle East tensions have pushed up oil prices, creating potential inflation risks.

OCBC expects no change throughout the year

OCBC Hong Kong economist Jiang Jing and Wang Hao Ting said they initially expected a rate cut in the third quarter, but recent geopolitical developments and energy supply prospects may limit the room for such cuts, leading to a longer period of stable rates. If the market refocuses on energy prices’ impact on growth, the pound is likely to give back some gains. The bank expects the GBP/USD support level in the next two weeks to be 1.3296, with resistance at 1.3602; GBP/HKD support at 10.4169, resistance at 10.6566.

The Bank of England held a monetary policy meeting yesterday, keeping the interest rate at 3.75%, and signaled readiness to raise rates again if necessary.

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