BoE on hold for now, but rate hike risks are rising
The Bank of England’s further hawkish tilt while leaving interest rates unchanged at 3.75% suggests the chances of near-term rate hikes are rising. If oil prices fall back to about $95pb as in our baseline scenario, our best guess is that rates will remain at 3.75% this year. But one or two hikes in the coming months are certainly possible, especially if energy prices stay around $115pb, or rise even further.
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