The market has finally come round to our long-standing view that Bank Rate will rise to 4.5%, with the Bank of England to likely to deliver another 25 basis point hike when it meets on 11th May. But what will follow? Resilient activity data and stubbornly-high inflation argue for interest rates going even higher. But previous rate hikes should start to weigh on growth, while the inflation picture could look a lot better in the coming months.
Our UK Economics team held a briefing shortly after the Bank of England’s May announcement all about the UK’s growth, inflation and policy outlook. During this 20-minute session, the team addressed key issues, including;
- What could push the Bank to raise rates above 4.5%;
- The recession question and its implications for UK monetary policy;
- How UK financial markets are likely to perform.
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