Related topic: Inflation

Despite the surprise ease in inflation, industry experts say the fall is unlikely to be sustained.

The IMF has upgraded GDP from 0.8% to 1% for 2026, but warns that domestic and international risks remain.

Monthly GDP grew by 0.3% in March, following growth of 0.4% in February, despite the outbreak of war in Iran.

One member voted to increase Bank Rate to 4%.

The rise reflects higher energy prices alongside wider economic uncertainty, although many industry experts expect the Bank of England to pause rather than hike rates.

The UK is projected to suffer the sharpest cut to economic growth forecasts.

Holding policy steady is preferable until the impact becomes clearer, Taylor says.

Markets are now pricing in the possibility of multiple interest rate increases this year.

This comes amid continued disruption in the Strait of Hormuz and significant damage to energy infrastructure across the Gulf.

There is growing market speculation that the Bank of England could increase rates as a direct consequence of the ongoing Iran-related conflict.