Editor's note: This brief was summarised by The Property AI Newsroom from a report by Guardian Property. Read the original article for full details.

UK Interest Rates Expected to Remain Unchanged Amid Middle East Peace Deal

UK and US central banks are expected to keep interest rates on hold this week, following a peace deal in the Middle East that is predicted to ease inflationary pressures. The Bank of England is expected to maintain its interest rate at 3.75%, despite UK inflation running at 2.8%, which is above its 2% target.

The report states that most members of the Bank of England’s nine-member monetary policy committee are likely to adopt a “wait-and-see” approach when they meet on Thursday. This follows the recent peace agreement between the US and Iran, which has led to a drop in oil prices. Financial markets are still pricing in the possibility of one more UK rate rise this year, in December.

The article also notes that the US Federal Reserve is expected to hold its benchmark interest rate at a range of 3.5% to 3.75% on Thursday. This will be the first policy decision under the new Fed chair, Kevin Warsh. Inflation in the US has risen from 2.4% in February to 4.2% in May.

For UK letting agents and inventory clerks, the decision to keep interest rates steady may mean continued stability in mortgage and loan rates. The Bank of England governor, Andrew Bailey, recently stated that there was less pressure on the monetary policy committee to raise borrowing costs after commercial lenders increased rates on loans and mortgages.

The European Central Bank (ECB) recently raised interest rates from 2% to 2.25% after eurozone inflation rose to 3.2% in May. ECB president Christine Lagarde commented that higher energy prices are starting to affect other parts of the economy.