According to most economists polled by Reuters, The Bank of England (BoE) is expected to raise the bank rate by 25 basis points this Thursday.
Key comments
“The Monetary Policy Committee will add another 25 basis points to the bank rate this week, taking it to 0.75%, its pre-pandemic level“.
“The central bank is expected to make a continuation of this week’s increase with another 25 basis point increase next quarter and an equal increase in the third quarter“.
“Then will raise the bank rate to 1.50% early next yearas shown by the median, although that rate was chosen by 15 of 44 economists, while 21 saw it lower and eight higher. In the February survey it was not expected to reach that level until 2024“.
“It is expected that inflation peaks at 7.7% next quarternearly four times the central bank’s 2% target and a sharp increase from the 6.6% median given last month. It was expected to slow down in the following quarters, but will not reach the target until the end of 2023.”
“15 of 18 economists said they were likely or very likely to revise their inflation forecasts upwards in the medium term in the coming months. Only three said it was unlikely.”
“Following the buoyant expansion in January, this quarter’s outlook was changed to 0.7% from 0.4%, but all subsequent quarters were lowered to 0.4% from 0.9% and to 0.6% and 0.6%.”
“Yearly rates were also lowered with growth now pegged at 3.9% this year and 1.7% next, versus 4.3% and 2.1% forecast the previous month.”
Source: Fx Street
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