Societe Generale’s United Kingdom (UK) economists highlight political uncertainty around Andy Burnham’s potential Labour leadership challenge and its policy implications, but still expect limited radical change. On monetary policy, they note Megan Greene’s likely vote for a June rate hike, yet forecast the BoE to keep rates on hold. They see April Gross Domestic Product (GDP) up 0.1% month-on-month before growth slows later in 2026.

BoE hold expected despite hawkish voices

"Last week in the UK, Manchester Mayor Andy Burnham confirmed that he would seek to challenge Starmer in a leadership contest if he wins the Makerfield by-election."

"One poll suggests Burnham would win the 18 June Makerfield by-election with 49% of the vote vs 39% for Reform."

"Burnham also confirmed that he would not call a snap general election if he became leader."

"MPC member Megan Greene indicated in both an FT article and a speech this week that she would likely vote for a rate hike at the June meeting, joining Pill, who voted for a hike in April."

"However, we expect these members to remain in the minority and for the BoE to keep rates on hold in June."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)