Bank of England must keep raising rates to finally kill off inflation, City experts say
- On July 20, 2023
- By GrowthInvest Marketing
The Bank of England should not yet let up on raising interest rates to ensure inflation has finally been defeated.
But by what magnitude? And when will we finally reach the peak?
Experts have their say.
“It will take much more than one negative surprise for the MPC to be confident that underlying inflation is sustainably turning down…. we think the MPC will look at the totality of the data, and last week’s labour market figures will raise serious questions about the durability of the decline in services inflation. Overall, while the data are encouraging at face value and mean that another 50bp hike at the August meeting is not a done deal, we think they still tilt the balance in favour of another 50bp move.”
“A watershed moment. June’s CPI report gives the MPC the green light to increase Bank Rate by 25bp next month, rather than by the hefty 50bp increment priced-in by markets as the most likely outcome. The headline rate in June matched the Committee’s forecast in May’s Monetary Policy Report, a massive improvement from May’s figures, which overshot its forecast by 0.4pp.”
Yael Selfin, chief economist at KPMG UK
“While the Bank of England will welcome the fall in inflation, it is unlikely to substantially change its hawkish policy stance as inflation continues to run significantly above target.”
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