The fall in the activity PMI to below the boom-bust level of 50.0 in August supports our long-held view that the economy will enter a recession. And with weaker activity dampening price pressures, we’ve become a bit more confident in our forecast that the Bank of England will raise interest rates from 5.25% to a peak of 5.50% rather than to the peak of 6.00% that was priced into the market before today.
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