The Federal Reserve has held its benchmark interest rate at 3.5% to 3.75%, although three policymakers voted for an increase. The split highlights persistent global inflation risks and the possibility of continued pressure on UK borrowing costs, sterling and corporate refinancing.
US inflation fell more sharply than expected in June as lower gasoline and energy prices reduced the annual rate from 4.2% to 3.5%. The figures have eased expectations of an immediate Federal Reserve interest-rate rise, although renewed conflict in the Gulf and rising oil prices could reverse part of the improvement.
China’s economy grew by 4.3% in the second quarter of 2026, its weakest rate in more than three years. Strong exports and high-tech manufacturing were offset by weak consumer demand, falling investment and a continuing property downturn, with important implications for UK exporters, importers and manufacturers.
il prices fell and global stock markets rose after reports of progress in US-Iran peace talks, easing fears of a prolonged energy shock. But disruption around the Strait of Hormuz remains a major risk for shipping, inflation and business confidence.
The US Federal Reserve and Bank of England are expected to keep interest rates on hold this week as markets assess whether the US-Iran peace deal will ease energy-driven inflation. For businesses, the decision may bring short-term relief, but borrowing costs, wage pressure and fuel-linked price rises remain key risks.
