UK Rate Hike Expectations Fall to 50bp as US-Iran Peace Talks Advance, Brent Crude Drops 3.5%

According to LSEG data, market expectations for UK rate hikes shifted lower on May 7 amid advancing US-Iran peace negotiations. The market now anticipates the Bank of England will raise rates by a cumulative 50 basis points in 2026, down from 66 basis points priced before this week's talks. Following the news, Brent crude oil fell 3.5% as investors bet on potential reopening of the Strait of Hormuz from a peace agreement.
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