BNP Paribas Sees UK Growth Slowing to 1% in 2026, Warns of Inflation Risks
BNP Paribas strategists project UK economic growth will decelerate to 1% in 2026 from 1.3% in 2025, while renewed inflation pressures from the Iran conflict could push prices higher and keep rates elevated.
Strategists at BNP Paribas have revised their outlook for the United Kingdom, forecasting a slowdown in GDP growth to 1% next year from an estimated 1.3% in 2025. The downgrade reflects moderating economic momentum amid persistent cost pressures.
The bank also flagged fresh inflation risks stemming from the war in Iran, which it said could reignite price growth. That scenario may force the Bank of England to hold interest rates elevated for longer, countering the growth drag.
The British pound has been sensitive to shifts in rate expectations and growth differentials as markets weigh the trade-off between sticky inflation and a weakening economy.
Source: FXStreet Forex News