BOE’s Bailey: Interest rates are not going back to pre-GFC levels


  • Further remarks by Bailey
Justin Low

Justin Low

Friday, 05/08/2022 | 07:25 GMT-0

05/08/2022 | 07:25 GMT-0

After presenting a dire forecast of the economy yesterday and noting that policy is “not on a pre-set path”, it is increasingly clear that the BOE will have to consider more seriously the risks on the other side of the coin. Most punters are now expecting the bank rate to reach 2.50% by year-end before the BOE pauses and are looking for rate cuts in 2H 2023.

Citi is expecting two 25 bps rate hikes in September and November before the BOE delivers rate cuts in August next year. Meanwhile, Oxford Economics sees the bank rate rising by another 75 bps by November before the central bank reverses that same amount in 2023. Danske Bank is expecting a 50 bps rate hike in September and 25 bps in November before the BOE calls it quits in the tightening cycle. (h/t @Adamlinton1)

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