Rates heading to 5.25%

The recent persistence of inflation leads us to think that the Bank of England will proceed with another 25 basis point (bps) rise in Bank Rate from 4.50% to 4.75% next Thursday and ultimately raise rates to a peak of 5.25%. Meanwhile, given the UK’s longer-lasting inflation problem and shrinking workforce, we think that it will take until late next year for the Bank to cut rates. 

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