Marketwatchers will be keeping a keen eye on news screens at lunchtime this Thursday, as the Bank of England’s Monetary Policy Committee shares details of its latest report and interest rate decision.
John Payne, Senior Economist at Dun & Bradstreet, has shared his comments with us as follows:
Payne said: “We expect the Monetary Policy Committee to hold the Bank Rate at 3.75%. The decision will centre on a trade-off between containing imported inflation from the Middle East conflict and avoiding a deeper squeeze on already fragile firms and consumers.
“Our data shows the UK economy entered 2026 in reasonable shape, with prompt payment rates improving among mid-sized firms and bankruptcies in Q1 falling to their lowest level in almost four years. But beneath the surface, stress is emerging in vulnerable sectors. Payment behaviour is deteriorating in hospitality and construction, a leading indicator of financial stress – with both sectors exposed to rising input costs, weaker demand
“This kind of divergence is exactly where near real-time data becomes critical, helping businesses respond before pressures fully materialise and enabling more proactive decisions on credit and supply chain exposure.
“While an interest rate hike appears unlikely in June, we expect pressure to build on a rate hike at the 30 July meeting. At that point, the Monetary Policy Committee will have updated Bank forecasts to digest, and early evidence of how the updated Ofgem price cap has impacted households. If a hike comes then, the businesses already showing strain will have very little room left to absorb it.”
