UK firms expect to raise prices more quickly as Iran war pushes up costs

Bank of England survey shows UK businesses are preparing to lift prices faster after the Iran conflict pushed up energy costs: CFOs now expect company prices to rise 3.7% over the next year, up from 3.4% in February, while expectations for economy-wide inflation have climbed to 3.5% from 3.0%. The shift comes alongside a more hawkish market rate path, with financial markets now pricing two BoE hikes by year-end from a current policy rate of 3.75%. The article frames the move as a direct spillover from the effective closure of the Strait of Hormuz, which has lifted oil and gas prices and raised fears of broader supply-chain and utility-bill pressure into winter. Chancellor Rachel Reeves is weighing targeted household support, while Bank governor Andrew Bailey has argued firms may still struggle to pass through costs given weak consumer demand. For precious metals, the key takeaway is higher geopolitical and inflation risk premiums, but the near-term policy response could be mixed: stronger UK inflation and rate expectations are typically a headwind for gold via yields, while Middle East supply disruption supports safe-haven demand. Watch whether UK inflation expectations continue to edge higher and whether BoE rhetoric shifts further toward tightening over the next few meetings.