UK inflation held steady at 2.8% in May 2026, above the Bank of England’s 2% target, as Middle East conflict drove energy and motor fuel costs higher and prompted the MPC to hold Bank Rate at 3.75% through April. This geopolitical shock reversed earlier expectations for two 2026 cuts, with futures markets now pricing in a greater chance of tightening; one MPC member already voted for a 25-basis-point hike in April. Trader sentiment at 57.5% implied probability for a hike this year reflects these persistent price pressures and divided committee views ahead of the June 18 decision, while acknowledging that further data could still shift the path.