That is according to several top City economists, who do not expect interest rate cuts until early next year.
Impetus on the Bank to keep piling the pressure on has receded due to inflation seemingly passing its peak of 11.1 per cent back in October.
Most, including the Bank’s monetary policy committee (MPC), think the rate of price increases is now on a downward path that will end up with it more than halving at the end of the year, probably to somewhere around four per cent.
The bulk of the tightening cycle’s heavy lifting has already been done. Cumulatively rates have risen 390 basis points between December 2021 and February 2023, the fastest acceleration since the 1980s.
Doing more damage now risks making the coming recession worse than it needs to be. The Bank last week said it expects inflation to fall below its two per cent by the middle of next year if rates stay at four per cent, indicating cuts may be needed to stimulate spending.
Read more at City A.M.
