Skip to main content

UK Markets Chart Pack (Aug. 2023)

We’ve become a bit more confident in our forecast that the Bank of England will raise interest rates from 5.25% now to a peak of 5.50%, rather than much further, as higher interest rates appear to be weighing more heavily on activity. The peak in UK market rate expectations has fallen from 6.00% to 5.75% as investors concluded that a weaker economy will trim inflation and the Bank has less work to do than previously thought. What’s more, we think the prospect of a mild recession could lead to a further fall in rate expectations in late 2024. That’s why we expect the 10-year gilt yield to decline from 4.45% now to around 3.00% by the end of 2025.

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

Get access