Bank of England MPG Discusses Energy, Inflation, and AI Impact

On 7 May 2026, from 5pm to 6.30pm, the Bank of England's Market Participants Group (MPG) convened at the Bank of England, led by the Governor. The discussions focused on both domestic and international economic changes in light of the ongoing Middle East conflict. Participants evaluated the outlook for energy prices, suggesting that a resolution could quickly restore prices to pre-conflict levels, although damage to infrastructure and the need for restocking might keep them high. Risk asset pricing rebounded, influenced by AI sentiment and corporate earnings, while global rates markets reacted more sensitively to energy price fluctuations. Currency markets remained stable. Domestically, there was consensus on increased upside risks to inflation and downside risks to growth, with near-term risks leaning towards a higher Bank Rate. However, opinions varied regarding the magnitude of potential rate increases, reflecting differing views on labor market conditions and policy tightness. The scenarios presented in the April Monetary Policy Report received positive feedback. MPG members included Andrew Balls (PIMCO), John Butler (Wellington Management), Richard Jackson (Tudor Capital Europe LLP), Pranav Thakur (JPMorgan), Karen Ward (JPMorgan Asset Management), and James Watson (Balyasny Asset Management), along with MPC members Clare Lombardelli and Catherine L Mann.