We have been saying for some time that despite a recession, the Bank of England would be forced to raise interest rates. The Bank of England's signal that it is stepping up the fight against high inflation despite its forecast that the UK economy is headed for a recession brought it closer in line with our view. We haven't changed our forecast that rates will rise to a peak of 3.00% and stay there until well into 2024. But we now think the risks are skewed towards interest rates being cut sooner.
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