Interest rates will rise again as early as next month as the Bank of England tackles soaring commodity prices, according to several forecasts from major US banks
Interest rates will rise again as early as next month as the Bank of England tries to tackle the soaring cost of goods, according to several forecasts from major US banks.
US investment bank JPMorgan expects the Bank to raise the base rate in February from 0.25% to 0.5%.
Analyst Allan Monks said he expects two more rate hikes of 0.25%, in August and November.
Robert Wood, an analyst at Bank of America who expects one rate hike in February and another in November, said: “The growth picture for 2022 will be dominated by strong real income compression and rate hikes. of interest.
Uptrend: US investment bank JPMorgan expects the Bank of England to raise the key rate as early as February from 0.25% to 0.5%
“We expect inflation to peak at 6.2% in April 2022. The precise peak will be highly dependent on natural gas prices and government actions.”
Goldman Sachs, which expects inflation to peak at nearly 7% as energy and supply chain costs rise, forecast increases of 0.25% in February and May.
The warnings come as the latest UK inflation figures are due out this week.
The Bank of England has come under fire after hinting at a hike in November, before members rejected it. It raised rates in December from a record low of 0.1% to 0.25%.
Gerard Lyons, chief economic strategist at online wealth manager Netwealth, said: “The Bank has misread the persistence of this rise in inflation and its magnitude.” The rate of inflation required action and will require further action.