The shift away from floating-rate to fixed-rate mortgages has meant that it was always going to take longer than in past tightening cycles for the rise in interest rates to feed through to the real economy. This is one reason why we think that once Bank Rate has peaked at 4.50%, it will stay there until early 2024. The risk is that it could take even longer for the full effect to be felt, strengthening our conviction in this view.
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