Following the most recent UK inflation estimate, economists anticipate a 25 basis point increase in the Bank of England’s benchmark interest rate in May.
Data on the UK labour market and inflation released this week have given the Bank of England (BoE) policy officials some positive surprises.
Analysts revise their projections in light of this week’s evidence supporting a further 25bps rate increase in May. Instead of seeing rates remaining unchanged, they now predict that the base rate will increase to 4.50% on May 11. Analysts increase our anticipated base rate for the end of the year to 4.50% from 4.25%.
Analysts anticipate further increases after May, but they believe the MPC will make choices meeting by meeting and rely primarily on how economic statistics change from month to month.
The market’s present belief that another 75bps of rises are probable before the end of the year is not shared by analysts.
Tags BoE labour markets uk economic data
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