US and UK central banks expected to hold interest rates steady after Iran peace deal
7 reported
Central banks in the US and UK are expected to leave interest rates unchanged this week, according to a single-source report from The Guardian. The US Federal Reserve is expected to hold its benchmark rate at 3.5% to 3.75% on Thursday, marking the first policy decision under new Fed chair Kevin Warsh, who was appointed by Donald Trump. The Bank of England is expected to hold rates at 3.75% despite UK inflation at 2.8%. Analysts cited in the report said the peace deal between the US and Iran, which triggered an immediate drop in oil prices, is predicted to ease inflationary pressures. The European Central Bank raised rates from 2% to 2.25% last week after eurozone inflation rose to 3.2% in May 2026.
What’s reported
The US Federal Reserve is expected to hold its benchmark interest rate at 3.5% to 3.75% on Thursday.
This is the first policy decision under new Fed chair Kevin Warsh, Donald Trump’s pick.
US inflation jumped from 2.4% in February to a three-year high of 4.2% in May.
The Bank of England is expected to hold interest rates at 3.75% despite UK inflation at 2.8%.
The peace deal between the US and Iran triggered an immediate drop in oil prices.
The European Central Bank raised rates from 2% to 2.25% last week after eurozone inflation rose to 3.2% in May 2026.
ECB president Christine Lagarde said higher energy prices were starting to feed through to other parts of the economy.
Key figures
Kevin Warsh, new chair of the US Federal Reserve, Donald Trump’s pick
Christine Lagarde, president of the European Central Bank
Andrew Bailey, governor of the Bank of England
James Smith, economist at ING
Sources: The Guardian
