Weakening economy won’t do the MPC’s job

The Bank of England’s prediction that the economy is on the brink of recession grabbed the headlines this week, but we suspect its GDP forecast will prove too downbeat. That’s not to say the risk of recession isn't real. But the bigger point of difference is that while the Bank expects the weaker economy to solve the issue of soaring inflation, we think it will require interest rates rising further than most people expect, to 3.00% next year. UK Housing Drop-In (10th May 10:00 BST/17:00 SGT): Economists from our property team are hosting a 20-minute briefing to explain why we think UK house prices are heading for a fall – and how bad the fallout will be. Register now.