We think that the upward revision to the MPC’s inflation forecast was about the right magnitude. But for the Committee to respond to this – or a greater – overshoot of the target, domestic costs pressures would also have to rise. We think that GDP growth will surprise the MPC on the upside from 2018 which would allow it to raise interest rates sooner than the market currently expects.
Subscriber content
Read this in full, free
Start a free trial and use one of your 10 free starter credits to unlock this piece.