|

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

AUD/USD keeps range near mid-0.7100s as USD bulls await US CPI

AUD/USD steadies near mid-0.7100s in the Asian session on Friday, stalling the previous day's sharp decline to an over one-week low. The August PPI report reaffirmed Fed rate-hike bets and boosted the US Dollar on Thursday, which weighed heavily on the pair. However, hawkish RBA expectations limited losses for the Aussie as USD bulls now await the release of the US consumer inflation figures before placing fresh bets.

USD/JPY holds lower ground toward 154.00; looks to US CPI

USD/JPY holds lower ground toward 154.00 in the Asian session on Friday after hot Japanese PPI data bolster a more hawkish BoJ repricing and provide fresh impetus to the Japanese Yen. However, the downside appears capped as the US Dollar preserves overnight gains ahead of the latest US consumer inflation data.

Gold: Gains remain capped by $4,400

Gold regains composure and trades with decent gains on Friday, managing to refocus attention on the $4,440 mark per ounce troy. Therefore, the precious metal reverses Thursday’s decline as the US Dollar alternates gains with losses at the end of the week.

Ripple Price Forecast: XRP extends decline as returning ETF inflows fail to lift outlook
Ripple (XRP) falls below $1.33 on Friday, marking the third consecutive day of declines. The token continues to track the broader cryptocurrency market downturn, with investors closely monitoring heightened macroeconomic uncertainty ahead of the United States (US) Consumer Price Index (CPI) release and next week’s Federal Reserve (Fed) monetary policy decision.
Weekly focus – The hawks set the tone
Risky assets came under pressure this week as energy prices kept creeping higher and the ECB surprised the markets with a hawkish tone. The price of Brent crude touched USD 110 per barrel on Thursday night, highest since mid-May, as news emerged that the Yemeni Houthis had reached control of key port cities and islands near the Bab el-Mandeb strait.
Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight
The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.