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UK interest rate of 7% may be needed from Bank of England, economist warns

Published 05/07/2023, 14:58
© Reuters. UK interest rate of 7% may be needed from Bank of England, economist warns
JPM
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Proactive Investors - The Bank of England may have to push interest rates as high as 7% and trigger a “hard landing” for the UK economy, a prominent economist has warned.

A hard landing for the economy "looks increasingly likely", said JPMorgan (NYSE:JPM) economist Allan Monks on Wednesday.

While his baseline forecast is that the base rate will peak at 5.75% he said there is a risk that rate hikes all the way to 7% will be needed if elevated wage growth continues to offset impact of rising mortgage rates.

Last month, the Bank's monetary policy committee (MPC) hiked the base rate to 5.0% as it tried to stem persistently high levels of inflation.

Since then the average rate for a two-year mortgage fix has almost reached 6.5% and a five-year fix has passed the 6% mark.

Read more on Proactive Investors UK

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Latest comments

Go with your gut feeling.
This is all to do with Brexit. Now we are all paying the price
the majority of british people voted for brexit because they wanted our country back and to free ourselves of the red tape of the european union.
Read the full report. This is a worst case scenario. They see peak at 5.75 in their central models. Clickbait title.
About time
obvious
Umm…. No
Tell me you are British without telling me
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