|

United Kingdom: BoE stance and Burnham politics – Societe Generale

Societe Generale’s United Kingdom (UK) economists highlight political uncertainty around Andy Burnham’s potential Labour leadership challenge and its policy implications, but still expect limited radical change. On monetary policy, they note Megan Greene’s likely vote for a June rate hike, yet forecast the BoE to keep rates on hold. They see April Gross Domestic Product (GDP) up 0.1% month-on-month before growth slows later in 2026.

BoE hold expected despite hawkish voices

"Last week in the UK, Manchester Mayor Andy Burnham confirmed that he would seek to challenge Starmer in a leadership contest if he wins the Makerfield by-election."

"One poll suggests Burnham would win the 18 June Makerfield by-election with 49% of the vote vs 39% for Reform."

"Burnham also confirmed that he would not call a snap general election if he became leader."

"MPC member Megan Greene indicated in both an FT article and a speech this week that she would likely vote for a rate hike at the June meeting, joining Pill, who voted for a hike in April."

"However, we expect these members to remain in the minority and for the BoE to keep rates on hold in June."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

More from FXStreet Insights Team
Share:

Editor's Picks

GBP/USD dips below 1.3350 as USD demand surges

GBP/USD extends its intraday slide and closes in on 1.3300 in the American session on Thursday. The pair remains under heavy bearish pressure as the US Dollar (USD) benefits from the risk-averse market atmosphere amid escalating geopolitical tensions in the Middle East.

EUR/USD drops toward 1.1350 post ECB decision

EUR/USD remains under heavy bearish pressure in the second half of the day on Thursday and trades at its lowest level in three weeks below 1.1370. The ECB's cautious tone on policy tightening in the near future and the broad-based US Dollar (USD) strength on risk-aversion drag the pair lower.

Gold bulls seem hesitant amid inflation-driven Fed hike bets and bullish USD

Gold consolidates the previous day's heavy losses and remains on the defensive below $4,050 during the Asian session on Friday amid rising expectations of a Fed rate hike, bolstered by energy-driven inflation concerns. Moreover, the US-Iran standoff and US President Donald Trump's new tariffs underpin the US Dollar's reserve currency status, which further weighs on the bullion. The XAU/USD pair, however, sticks to modest weekly gains as traders look to the global flash PMIs for fresh impetus.

Ethereum: Derivatives interest in ETH improves, but signs of caution remain

Ethereum is hovering slightly below the $1,900 level, down 3% on Thursday following a slight expansion in derivatives interest. The top altcoin's open interest has increased to 14.60 million ETH, marking a 600K ETH increase over the past two days and its highest level since June 7.

Bitcoin falls as surging Oil prices revive inflation concerns

Bitcoin extends its correction, trading below $65,800 after a modest decline in the previous day. Despite BTC’s fading strength, US-listed spot Bitcoin Exchange Traded Funds continued to attract institutional inflows on Wednesday, marking the seventh consecutive day of gains.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?
The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.