Bank not yet willing to call the peak

Another 50 basis points (bps) rise in interest rates, from 3.50% to 4.00%, at the Monetary Policy Committee (MPC) meeting on Thursday 2^nd February wouldn’t surprise the markets. But our view that rates will subsequently rise to 4.50% is higher than current market pricing of a peak of 4.25%. Further ahead, we think the markets will be surprised by how fast interest rates are cut in 2024.

We will be discussing the policy outlooks for the BoE, the Fed and the ECB in a Drop In on Thursday 2^nd February at 4pm GMT. (Register here.)