Markets pushed up the likelihood of near-term Bank of England rate hikes after renewed US–Iran hostilities. The US carried out airstrikes on Iran on Wednesday night and Iran attacked vessels transiting the Strait of Hormuz, raising concerns about oil-supply disruption and upward inflation pressure. LESG shows markets now price a cumulative 31bp of UK rate hikes for 2026, up from 23bp before Trump’s Wednesday remark that an Iran ceasefire had ended.

Iranian media reported that Iran's foreign ministry summoned the British ambassador in Tehran after UK officials repeatedly made unfounded accusations against Iran.

US President Trump said he may strike Iran again tonight and will monitor developments before deciding. He said Iranian behavior was extremely bad and that the US struck Iran after Iranian attacks on ships in the Strait of Hormuz. He added any US strikes are aimed at preventing Iran from acquiring nuclear weapons, not regime change, and reiterated that Iran must not obtain nuclear weapons.