Deutsche Bank expects the Bank of England to hike Bank Rate for a thirteenth consecutive meeting next Thursday, by a quarter-point to 4.75%.
But the decision by the monetary policy committee probably wonโt be unanimous; they predict a 7-2 vote tally, with both Silvana Tenreyro and Swati Dhingra voting to keep rates on hold.
Deutsche then expect two further rate hikes taking Bank Rate to 5.25% in September, before a pause in November.
Senior economist Sanjay Raja explains: โInflation, we think, will continue to remain volatile and skewed to stronger prints in the near-term.
โAnd the labour market will also likely remain hot in the very near-term as the ONS incorporates more of the forthcoming pay deals into the hard data. We do, however, see downside risks emerging from late Q3 to early Q4, allowing the MPC to push the pause button at the November meeting.โ
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