Rolling coverage of the latest economic and financial news, including the Bank of England’s interest rate decision at noon
- Bank of England poised to raise UK interest rates to 5.25%
- TUC urges Bank of England to halt ‘reckless’ interest rate increases
The financial markets currently expect UK interest rates to peak around 5.75% next spring, up from 5% today (well, until lunchtime, anyway).
A month ago, the markets had forecast a higher peak of 6.5%, but expectations have fallen after UK inflation dropped in June.
After pencilling in a peak base rate above 6% a month ago, the market is now anticipating the BoE to stop hiking once it reaches 5.75%. This seems justified at this particular point in time.
We are more sceptical about the market’s view that rates could stay at this level for much of 2024.
