BoE’s Bailey: Rate Hikes May Not Be Over Until US-Iran Conflict Ends

Bailey's framing is notable because it makes UK monetary policy explicitly contingent on a geopolitical outcome the central bank cannot control or forecast, effectively importing Middle East risk into the gilt curve. That matters most for rate-sensitive UK borrowers and for anyone pricing the terminal rate, since it removes the assumption that the current hike is the end of the cycle. The absence of any size or timing guidance leaves the reaction function vague, which itself is a source of volatility. The open question is whether other policymakers echo this linkage or treat it as a one-off remark.