Since the ONS released the data, the UK market has been waiting for the Monetary Policy Committee to decide on interest rates.
The increase in interest rates we now anticipate is likely to be felt by the end of 2023, and we forecast a recession to follow between Q4 2023 and Q2 2024.
“A more credible central bank might have been able to leave interest rates on hold today. Indeed, two members of the Monetary Policy Committee (MPC) voted to do just that. The full impact of previous rate increases has yet to be felt and there are still good reasons to expect inflation ...
The peak in UKinterest ratespriced by swaps markets has risen dramatically in recent weeks, from 5 per cent as recently as May to 6.25 per cent following the Bank of England’s unexpected decision to raise interest rates to 5 per cent in June. “There’s a self-feeding dynamic here ....
“CPI in the UK may have begun to fade from the recent highs, but it remains well above the 2 per cent target that would allow the BOE to declare victory over the inflation battle. Interest rates are starting to bite. House prices are falling at their fastest pace since 2009, broad mon...
Increased funding costs. Highly leveraged companies backed by private equity face difficulties in the current environment of higher interest rates. There is a risk that “amend and extend” or “payment in kind” agreements give false comfort to companies, increasing their credit losses in future. ...
British headline inflation fell to the Bank of England's 2% target in May, raising expectations for when the central bank might begin trimming interest rates. Britain has weathered a number of economic hardships under the Conservative leadership, from the Covid-19 pandemic to inflationary pressures...
The central bank expects the country's GDP to be broadly flat in the fourth quarter of 2023 and 2024, and then have a paltry 0.25 percent growth in 2025. "2024 is set to be another year of weak growth for the UK, as the pressure of higher interest rates continues to erode household ...
Interest rates - a historical view With the Bank of England saying rates could remain high for longer, and one expert suggesting they could stay over 4% until 2029 (see 12.23 post), we thought we'd take a look at a his...
“soft landing”, where inflation falls back to the 2% target without a recession. And if interest rates do peak at 5.5% or 5.75% then the UK may avoid a recession by the skin of its teeth. But if interest rates rise to the 6.5% level that financial markets were pricing in only a ...