According to economists, the Bank of England is predicted to increase interest rates three additional times this year, due to ongoing high inflation.
A Reuters poll indicates that by the end of 2023, borrowing is expected to reach a high of 5.75pc, which would be the most expensive since 2007.
Close to 70pc of economists foresee the Bank of England escalating interest rates by 0.25pc to 5.25pc at the upcoming Monetary Policy Committee assembly on August 3.
The broader survey participants largely predict a 0.25 point surge in September, with a median forecasted peak rate of 5.75pc.
This follows 13 successive rate increases that led market participants to estimate a peak of 6.5pc in the recent past.
Nonetheless, inflation experienced a larger-than-anticipated drop last month, descending from 8.7pc to 7.9pc. This development caused traders to adjust their interest rate projections downward, aligning economists and market predictions on a peak of 5.75pc.
Bruce Kasman, JP Morgan’s chief economist, stated, “The Bank of England has more work ahead, but the unexpected inflation decrease reinforces confidence in a return to a 25 basis point rate of tightening in August.”
The US Federal Reserve is set to make its forthcoming interest rate decision this Wednesday, with the European Central Bank’s decision due the following day, Thursday.
