Will the Inflation Report open the door to a rate hike?

This week’s Inflation Report will give us a clearer idea of how close a shave last week’s Monetary Policy Committee (MPC) meeting was. Although the Committee will probably revise down its forecasts for economic growth this year, its forecasts for inflation will probably rise. We think that the MPC will use the Report at least to give itself room to raise rates within the next few months – even if, in our view, it does not actually end up hiking.

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