Phoebus inflation comment

19 August 2026

Richard Pike, sales and marketing director at Phoebus Software:

“With the stop-start conflict in the Middle East continuing to fuel volatility in global oil prices, alongside last month’s increase in the energy price cap, a rebound in inflation from June’s 2.6% was always likely.

“July’s reading at 2.9% would usually put more pressure on the Bank of England to increase base rate in September to help curb rising prices. The last MPC vote was 6-3 to hold, and this latest reading will strengthen the hand of those calling for higher rates. However, with rising unemployment, house prices looking like they may start to reduce in many areas and the fact that grocery inflation is not nearly as bad as predicted means this is not a straight-forward decision. The Bank could take the view that as inflation is being driven by oil price rises, they need to give the public some respite.

The road back to 2% is going to be a long and bumpy one and for lenders and borrowers alike, the coming months are likely to be defined by continued uncertainty.”