UK forecast update: Rising trade-offs amid energy shock in World Economy News 08/04/2026 BofA Securities has slashed its UK growth forecast on Tuesday to 0.6% for 2026 and 1.1% for 2027, while raising inflation projections to 3.5% and 2.5% respectively, as elevated energy prices from ongoing conflict are expected to persist through most of this year. The bank now expects oil prices near $100 per barrel and UK natural gas prices close to 190 pence per therm until year end, representing a more prolonged shock than previously anticipated. This has prompted economists to revise their Bank of England rate outlook, now forecasting two 25 basis point hikes in June and July 2026 to 4.25%, followed by three quarterly cuts starting in April 2027. Quarterly growth is expected to average just 0.1% to 0.2% in 2026, with unemployment rising to 5.3% by the second half of the year. BofA does not anticipate a recession but warns that higher inflation will squeeze real incomes and dampen consumer confidence. The inflation forecast shows prices peaking at 4.1% in the fourth quarter of 2026, with core inflation rising to 2.9% for the year. The return to the Bank of England’s 2% target, previously expected in the second half of 2026, has been delayed to the second half of 2027. BofA does not expect the Chancellor to break or suspend fiscal rules, with any support measures likely to be targeted and temporary, costing low single-digit billions. Possible measures include delaying the September fuel duty rise or providing targeted support to low-income households. The bank noted that the situation remains fluid, with the path of monetary policy dependent on how energy prices evolve. If the shock subsides by mid-year or the labour market deteriorates materially, the Bank of England could remain on hold in 2026. Conversely, if energy prices move sustainably higher, more than two rate hikes could be delivered. Source: Investing.com 2026-04-08 hellenicshippingnews... window.___gcfg = {lang: 'en-US'}; (function(w, d, s) { function go(){ var js, fjs = d.getElementsByTagName(s)[0], load = function(url, id) { if (d.getElementById(id)) {return;} js = d.createElement(s); js.src = url; js.id = id; fjs.parentNode.insertBefore(js, fjs); }; load('//connect.facebook.net/en/all.js#xfbml=1', 'fbjssdk'); load('https://apis.google.com/js/plusone.js', 'gplus1js'); load('//platform.twitter.com/widgets.js', 'tweetjs'); } if (w.addEventListener) { w.addEventListener("load", go, false); } else if (w.attachEvent) { w.attachEvent("onload",go); } }(window, document, 'script')); tweet Share