June’s resilience won’t last as virus disruptions hit

The 1.0% m/m rise in GDP in June was an impressive result. But we suspect that GDP growth in Q3 will be closer to 2.0% q/q than the 2.9% q/q forecast by the Bank of England. And we still think that CPI inflation will be lower than the Bank expects at the end of 2022. As such, we remain comfortable with our view that Bank Rate will rise from 0.10% to 0.25% in August 2023, a year later than the financial markets anticipate.