Will the BoE adopt a restrictive monetary policy from June onward?


19 Jun

Will the BoE adopt a restrictive monetary policy from June onward?

GDP overestimated in Q1. Negative growth likely in Q2. Services sector slumps. Massive blow to employment in May. Consumer confidence at an all-time low. Rise in producer prices (+7.7%). Opportunities in real estate. Be cautious with stocks.

Key points

  • The ONS is likely overestimating growth in Q1 2026
  • Negative growth (-0.2%) expected for Q2
  • Alarming drop in the services PMI
  • Massive shock to the labor market in May (-100k)
  • Household confidence hits lowest level in 36 months
  • Sharp rise in producer prices (+7.7%) in April
  • Will monetary policy turn restrictive again starting in June?
  • Bond yields stabilizing at high levels
  • British pound supported by interest rates
  • Direct real estate less attractive than discounted REITs
  • British stocks still consolidating