abrdn: Bank of England interest rate peak reached

abrdn: Bank of England interest rate peak reached

Monetary policy UK
Geld ponden.jpg

Luke Bartholomew, Senior Economist at abrdn, comments on today's Bank of England meeting:

'After yesterday’s inflation data, today’s policy decision looked to be on a knife edge. So while the decision to keep rates on hold is a formal surprise compared to market and economist forecasts, it is not really a shock.'

'While the Bank has suggested it could hike again if inflation proves to be more than expected, it is likely that interest rates have now peaked. The economy is deteriorating rapidly and we expect a recession later this year.'

'In that context, despite the talk of a “Table Mountain” profile of an extended pause in interest rates, we think investor speculation will very quickly turn to the timing of the first rate cut.'