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T. Rowe Price chief European economist Tomasz Wieladek said in a report that faster economic growth in the UK could mean further monetary tightening by the Bank of England in the future.
The economy grew by a better-than-expected 0.5% in June, driven by a surge in manufacturing output.
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Wieladek said this suggested that the Bank of England’s attempts to rein in high inflation by raising interest rates to curb demand were not working as expected.
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Perhaps the Bank of England has not tightened enough, or there has been a noticeable lag in policy effects, he said.
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Even if next week’s inflation data is better than expected, the Bank of England may need to raise interest rates again.
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