“The Bank of England (BoE) looks set to raise borrowing costs by a further 50 basis points (bps) next week, though it could go even higherwhich would compound the problems of indebted households already facing a cost-of-living crisis,” says the latest Reuters poll of economists.
Main results
The vast majority of economists polled by Reuters between September 9 and 13, 40 of 47 said they would add the same amount on September 22, raising it to 2.25%.
The remaining seven economists said the BoE would opt for a 75 basis point hike. next week, as it struggles to contain inflation that is more than five times its 2% target.
In a survey conducted in August, the Bank Rate was expected to peak later this year at 2.50%.
When asked about the risks of that maximum interest rate forecast, 18 of 19 respondents to an additional question said it would be higher or significantly higher. Only one said the risk was lower.
Despite expectations of strong hikes by the central bank, the struggling British pound will not recover its losses against the US dollar in the short term due to the expected recession and the increase in government spendingaccording to another Reuters poll.
When asked about the probability of a recession a year from now, the median was 75% and two years from now it was 80%, although most respondents to another question said it would be long and shallow.
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
