Haskel, in his article in The Scotsman, stated that the British economy is going through a very difficult period and that the increase in energy and food prices especially hit households and businesses.
Reminding that inflation fell to 8.7 percent in April after reaching a record level of 11.1 percent in October 2022, Haskel said, “Inflation is still very high. We are committed to our target of reducing this rate to 2 percent, and to achieve this we have car interest rates. A rise in interest rates inevitably means an increase in borrowing costs, but persistent and high inflation has further economic costs.” used the phrases.
Noting that they closely follow the “trend and persistence” of inflation, Haskel said, “My opinion is that further increases in interest rates cannot be ignored in the face of the trend in inflation. No matter how difficult our current conditions are, it is much worse for inflation to be buried in the country’s economy.” made its assessment.
UK rates unlikely to fall before 2024
In the note published by ING on interest rates in the UK, it was reported that due to persistent and high inflation, the market priced the BoE to increase interest rates 4 more times this year.
It was noted in the note that salary increases in the country peaked, and that a downward trend in interest rates is not expected before 2024.
ING expects the BoE to begin its first rate cut in the middle of next year, cutting rates by as much as 3 percent.
In its last meeting on May 11, the BoE raised the policy rate from 4.25% to 4.50%. While the projections that the Bank will continue to increase interest rates before its meeting on June 22 become clear, inflation data for May will be announced on June 21, just before the meeting.