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- Bank of England to raise rates by 50bps again to tame inflation – Reuters poll
Bank of England to raise rates by 50bps again to tame inflation – Reuters poll
“The Bank of England (BOE) looks set to hike borrowing costs by another 50 basis points (bps) next week, although it may opt for an even bigger move, adding to the woes of indebted households already facing a cost of living crisis,” stated the latest Reuters poll of economists.
Key findings
The overwhelming majority of economists in a Sept. 9-13 Reuters poll, 40 of 47, said it would add the same amount on Sept. 22, lifting it to 2.25%.
The remaining seven economists polled said the BoE would opt for a 75-basis-point hike next week as it battles to contain inflation running at more than five times its 2% target.
In an August survey, Bank Rate was expected to top out at the end of this year at 2.50%.
When asked how the risks to that peak interest rate forecast were skewed, 18 of 19 respondents to an extra question said it would be higher or significantly higher. Only one said the risk was it would be lower.
Despite expectations for hefty rises from the central bank, Britain's struggling pound will not regain its losses against the US dollar anytime soon due to an expected recession and increased government spending, another Reuters poll found.
When asked about the likelihood of a recession within a year the median was 75% and within two years it was 80% although a majority of respondents to another question said it would be long and shallow.
Also read: GBP/USD Price Analysis: Steadies around 1.1500 with eyes on UK inflation
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