The Bank of England lived up to expectations and raised Bank Rate by 25 basis points to 4.50%. Whether further hikes will follow depends primarily on how persistent inflation is, economists at Commerzbank report.
BoE raises key rate by 25 bps
“As expected, the BoE raised the key interest rate by 25 bps to 4.50%. The decision was made by a vote of 7:2. The minority preferred unchanged interest rates.”
“In our forecast, we do not expect any further interest rate hikes. Ultimately, it will probably depend on the data. However, the fact that the statement does not attempt to push back against speculation of further moves suggests that the risk of at least one more hike is high.”