Commenting on The Bank of England interest rate, Melanie Baker, Senior Economist at Royal London Asset Management said:
Despite forecasting a recession, the Monetary Policy Committee (MPC) are sounding more worried about domestically driven inflation pressures and have hiked rates again.
It is very unlikely to be the last hike, although the MPC guidance gives little away about the future path for policy on the face of it. The Governor was clear that the Bank of England are not on a set path for interest rates. However, their forecasts for inflation indicate that they think further rate hikes will be needed to get inflation back down to the 2% target over a two-year horizon.
They are now expecting CPI inflation to reach 13% year-on-year in Q4, which re-emphasises the scale of the challenge facing household finances this year where pay growth is not keeping up and interest rates are rising.
The views expressed are those of the author at the date of publication unless otherwise indicated, which are subject to change, and is not investment advice.