As oil prices fall, investors reduce their bets on the Bank of England raising interest rates.

With the drop in oil prices, the market is lowering its expectations for the Bank of England to raise interest rates in 2026. Since the peace agreement between the US and Iran, Brent crude oil prices have dropped from around $90 per barrel to $73. This decline has eased concerns about inflation and reduced the need for the Bank of England to raise interest rates to address inflation. Data from the London Stock Exchange Group shows that investors now believe there is a 78% chance of a rate hike by the Bank of England in December, lower than the market's expectations for a rate hike before the US-Iran agreement.