It’s become clearer that domestic inflation isn’t going to fall while economic activity is strengthening. As such, we now think that the Bank of England will have to raise interest rates further, from the current rate of 4.50% to 5.25%, to generate the economic weakness required to quash inflation. So unlike the Bank, the OBR, the IMF and most other forecasters, we are not taking a recession out of our forecasts.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services