Our new forecasts for 2022 envisage CPI inflation rising further than most expect to a peak of 7% and the Bank of England raising interest rates quicker, from 0.25% now to 1.25% by the end of the year. COVID-19 has the capacity to spring more surprises. But the main macro risk is that CPI inflation stays above the 2% target for longer, which could mean the Bank raises interest rates above 1.25% in 2023.
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