The Bank of England is expected to raise interest rates by 50 basis points on Dec. 15, even as Britain heads into a long but shallow recession and consumers face an ongoing cost-of-living crisis, a Reuters poll of analysts found. 3.50%, previously expected to be 3.75%.
“In terms of being able to get back to 50 basis points of rate hikes, I think there’s enough in the autumn statement to calm some of the BoE’s concerns about the outlook for next year,” said ING analyst James Smith. “When you listen to By the time some MPC members are speaking, you will find that in November they were trying to send a very strong dovish signal,” the survey showed that the Bank of England will pause rate hikes at 4.25%, compared with the previous month. The terminal rate was flat. But when asked about the risks to terminal rate forecasts, 15 respondents said the terminal rate would be reached later and higher than expected, and seven said it would be earlier and lower than expected.
