The Bank of England is expected to raise interest rates for the 10th time in a row on Thursday as it continues to combat high inflation, but it may also give a hint as to when the aggressive hikes will end. With the U.K. economy expected to slip into recession and be in worse shape than other economies, Bank of England Governor Bailey and other members must judge how much of a delay any rate hikes from December 2021 will have.
Most investors currently expect the Bank of England to raise interest rates by another 50 basis points today to 4.0%, the highest level since 2008. Paul Dales, an economist at Capital Economics, said the central bank was approaching the moment when it would have to give new interest rate guidance. The Bank of England has so far promised to fight inflation “strongly”. Lingering inflationary pressures are expected to mean rates stay at peak levels for about a year before being cut in 2024, he said.
