Minutes of the Market Participants Group meeting – 7 May 2026

Contents

Time: 5pm – 6.30pm | Location: Bank of England

Item 1 – Welcome

The Governor began the meeting by thanking attendees for joining and reminding participants of the purpose of these meetings. The Governor made clear that the MPC would be in listening mode, and that the meeting would be conducted in accordance with relevant competition and conduct laws, as per the terms of reference.

Item 2 – International developments

Market participants discussed the outlook for energy prices in the context of the Middle East conflict. Some judged there were pre-existing market supply dynamics which, in the event of a resolution, could support a relatively swift return to pre-conflict levels. Some thought infrastructure damage and re-stocking might mean prices remain nearer present levels over the medium-term. Others raised the possibility of an adverse impact on demand were prices to rise sharply.

Market participants noted that risk asset pricing had recovered to levels that were at or above those prevailing pre conflict. This in part reflected the longer duration nature of equities, but also the separate dynamic of AI-related sentiment and corporate earnings.

In contrast, global rates markets and central-bank policy path pricing had continued to respond more dynamically to energy price developments. The positive correlation of equity and fixed income markets in recent episodes of volatility was discussed. The reaction of currency markets to the conflict had so far been relatively benign, and participants expressed a range of views on the outlook for FX.

Item 3 – Domestic developments

Market participants discussed how the Middle East conflict had impacted their assessments of the UK outlook. There was broad agreement that upside risks to inflation and downside risks to growth had increased. Opinions differed though on the weightings attached to each and the implications for the policy path.

Market participants agreed that near term risks had skewed towards Bank Rate moving higher. However, there was debate over the extent to which rate rises were expected. This reflected varying views about the offset to second-round effects being provided by labour market weakness and the restrictiveness of policy. The use of scenarios rather than a central forecast to present the outlook in the April Monetary Policy Report was viewed favourably given the prevailing uncertainties.

Market Participants Group (MPG) members

Andrew Balls - PIMCO

John Butler – Wellington Management

Richard Jackson – Tudor Capital Europe LLP

Pranav Thakur – JPMorgan

Karen Ward – JPMorgan Asset Management

James Watson – Balyasny Asset Management