Berenberg Bank Economists: Middle East Conflict May Keep UK Inflation at 3% in 2026

Berenberg Bank economists have reported that high energy prices, driven by the Middle East conflict, could maintain UK inflation at approximately 3% in 2026, surpassing the Bank of England's target of 2%. According to Jin10, the weakening wage growth in the UK is expected to help mitigate the risks of high inflation. Despite the impact of the Iran war keeping inflation above the target, the UK's inflation issues are unlikely to be more severe than those in other countries.