The Bank of England’s move risks squeezing the economy just as inflation is expected to start falling
Tasked with striking a balance between an unexpected increase in February’s inflation numbers and concerns about a new banking crisis, the Bank of England voted today for an 11th consecutive rate rise. The question now is whether they will opt for a 12th.
Markets are pricing in a further small hike to 4.5%. However, a glance at the forecasts for inflation show it declining rapidly this year, mostly in response to a dramatic fall in energy costs. While wholesale gas prices are expected to be double the pre-pandemic level next year, they will have fallen back from the five-fold increase in 2022.
Continue reading…The Bank of England’s move risks squeezing the economy just as inflation is expected to start fallingTasked with striking a balance between an unexpected increase in February’s inflation numbers and concerns about a new banking crisis, the Bank of England voted today for an 11th consecutive rate rise. The question now is whether they will opt for a 12th.Markets are pricing in a further small hike to 4.5%. However, a glance at the forecasts for inflation show it declining rapidly this year, mostly in response to a dramatic fall in energy costs. While wholesale gas prices are expected to be double the pre-pandemic level next year, they will have fallen back from the five-fold increase in 2022. Continue reading…