Updated

Updated · Mitrade · Jul 27

BNP Paribas Sees UK Growth Slowing to 1% as Iran War Inflation Forces 25 bp BoE Hike

Updated

Updated · Mitrade · Jul 27

BNP Paribas Sees UK Growth Slowing to 1% as Iran War Inflation Forces 25 bp BoE Hike

2 articles · Updated · Mitrade · Jul 27

UK growth is set to slow to 1% in 2026 from 1.3% in 2025, BNP Paribas said, reversing expectations for easier monetary policy.
3.2% inflation driven by the Iran war is expected to keep price pressures well above the Bank of England's target, with inflation still seen at 3.1% in 2027.
A 25 basis-point BoE rate hike is now forecast for the second half of 2026, while 10-year gilt yields stay elevated before falling to 4.30% in 2027.
Sterling is also seen weakening against the dollar into 2027, with BNP Paribas forecasting GBP/USD at 1.32 by the fourth quarter of 2026.

Sources

Will the British pound's projected collapse against the dollar signal a deeper structural decline for the UK economy?

With the Bank of England poised to hike rates, are UK homeowners facing a catastrophic mortgage shock this year?

Could soaring energy bills from the Iran conflict trap the UK in a devastating stagflation nightmare by late 2026?

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