Interest rate update……………..

Bank could rein in rate hikes despite inflation fears – according to the Evening Standard.

Experts believe the Bank of England may scale back interest rate rises due to the conflict in Ukraine, with analysts at ING saying there has been a “massive” re-pricing of interest rates in the UK, with markets now betting on rates rising from 0.5% to 1.5% by the end of the year. This is a significant dip on the previous expectation of a peak of more than 2.25%. This comes despite economists warning that the invasion of Ukraine will see inflation surge to around 8% in April. ING’s analysis said: “Despite the surge in European natural gas prices and what that means for UK inflation – we have that peaking near 8% now not 7% – the Bank of England tightening cycle has suffered one of the largest re-pricings lower.” Economist Samuel Tombs at Pantheon Macroeconomics believes the Bank will deliver just two more rate rises this year, saying the firm has “become more confident in our call” that the Monetary Policy Committee “will only manage to raise Bank Rate to 1% this year, with 25 basis point hikes in March and May, followed by a long pause.”