Overview

• In the June Monetary Policy Committee meeting the Bank of England kept its policy rate at 4.25 per cent with a 6–3 split as Taylor, Ramsden and Dhingra voted for a quarter-point cut.
• Taylor called for three additional quarter-point rate reductions this year during a speech at the European Central Bank Forum in Portugal, arguing that the inflation outlook faces greater risk of being pushed off track.
• He cautioned that demand weakness and global trade disruptions increase the probability of a downside scenario in 2026 and threaten the prospect of a soft landing.
• Taylor described energy shocks following recent missile exchanges between Israel and Iran as a major unknown for future monetary policy decisions.
• Governor Andrew Bailey and most MPC members remain cautious as they monitor persistent inflation above target, signs of labour-market softening and geopolitical headwinds before approving further easing.