Andrew Bailey wants to make one thing very clear: a ceasefire is not a green light for cheaper borrowing.
The Bank of England governor stated that a 60-day ceasefire in the US-Israeli war with Iran would still leave too much uncertainty hanging over the UK economy to justify immediate interest rate cuts. The remarks, made in late May 2026, land at a moment when markets are desperately searching for any signal that relief is coming.
The rate that didn’t move
The BoE held its main policy rate at 3.75% during its most recent decision, a hold that reflects just how tangled the current macro picture has become. Energy prices remain volatile, largely because of ongoing disruptions in the Strait of Hormuz, the narrow waterway through which a massive share of global oil supply flows.
A tentative deal between US and Iranian negotiators to extend a 60-day ceasefire was reported around May 28-29, 2026. The agreement still needs higher-level approvals, meaning it could easily fall apart before the ceasefire is secured.
