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Stepping up the fight

We expect the Monetary Policy Committee (MPC) to step up its fight against high inflation at its meeting on Thursday 4th August by raising interest rates by 50 basis points (bps), from 1.25% to 1.75%, rather than repeating the recent 25bps hikes. What’s more, the MPC may imply that it is willing to raise rates by 50bps at future meetings if there are no signs that domestic price pressures are easing. That would support our view that interest rates will peak at 3.00% rather than the analyst consensus of 2.00%. We will be responding to the MPC’s announcement and answering questions from clients in a “Drop In” webinar at 3.30pm BST on Thursday 4th August. (Register here.)

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