The Bank of England has finished raising interest rates and will hold them until the second quarter of next year
The Bank of England has probably finished tightening policy and will keep interest rates at 5.25 per cent on November 2, according to the vast majority of economists polled by Reuters, although they warned that another rise this year remained highly likely.
Also in line with market expectations, 61 out of 73 economists in the survey, conducted Oct. 18-23, believe the Bank of England will take no action next week despite inflation unexpectedly stabilizing at 6.7 percent in September, the highest of any major developed economy.
James Smith, an economist at ING, said: "The Bank of England left rates unchanged in September and since then there hasn't been much data to change that stance. The data we have - wages, inflation - are not very different from what everyone expected. The most important part is that the effects of previous rate hikes are still being felt."
Only 12 economists expect rates to rise by 25 basis points to 5.50 per cent at the monetary policy committee meeting in November, according to the survey.
In addition, 16 of the 28 respondents said the likelihood of another rate hike this year remains high. Despite a cumulative increase of 515 basis points since December 2021, inflation in the UK (GBR) is still more than three times the central bank's 2% target.
HSBC's Elizabeth Martins said: "At some point, when core and services inflation are on a given downward trend, the MPC may want to shift to more neutral guidance." But we don't think policymakers are ready to make that change."
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