Stable Market Minute - 16th March 2026: Bracing For Base Rates

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Last week brought a mix of economic developments, painting a picture of uncertainty in both the UK and US markets. UK GDP figures for January remained unchanged, with industrial and manufacturing numbers showing a slight decline. Across the Atlantic, the US faced a contraction in its Q4 GDP annualised figures by 0.7%.

In the currency markets, the USD showed positive movement against its peers. As of last week, GBP/USD stood at 1.3250, EUR/USD at 1.1450, and GBP/EUR at 1.1576. The euro faced notable challenges, largely due to its dependence on imported oil and growing energy crisis concerns, driving the market to price it lower.

Commodity markets saw gold dipping below $5,000 per ounce, while oil hovered around $100 per barrel. This week, all eyes are on the interest rate decisions from the Bank of England and the Federal Reserve. Despite previous expectations of a BoE rate cut, once predicted at an 80% likelihood, current projections have plummeted to just 20%, with the real probability potentially even lower.

Financial institutions like Halifax and HSBC have already started increasing mortgage rates, reflecting broader market concerns. Meanwhile, businesses are grappling with rising shipping costs and potential spikes in energy bills, adding to their financial strain.

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