While raising rates by 50 basis points (bps) today, from 3.50% to 4.00%, the Bank of England implied that rates are very close to their peak. We still think that rates may rise to 4.50%, but perhaps via two 25bps increases rather than one 50bps rise. Either way, we think that lingering domestic inflation pressures will force the Bank to keep interest rates at their peak for all of this year.
We will be discussing the decisions of the Bank of England, the Fed and the ECB in a “Drop In” webinar at 4pm GMT today. (Register here.)
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