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The Bank of England (BoE) has delayed its interest rates decision for one week, following the death of Queen Elizabeth II.
The meeting of the Monetary Policy Committee, which was expected to further raise interest rates, is now expected to be held at 12pm on 22 September, in light of the period of national mourning being observed in the UK.
Financial markets have predicted that the BoE will more than double interest rates by May next year amid concerns around further rises in UK inflation and rising energy prices, according to the Guardian.
The base rate is expected to finish the year above 3% and could peak at close to 4.1% in June 2023, based on interest-rate derivatives linked to the meeting dates of Threadneedle Street’s monetary policy committee.
The Bank is then expected to cut rates close to 3.8% by the end of next year amid expectations of fading inflationary pressures and a “lengthy” recession.
Last month (August), the BoE raised interest rates from 1.25% to 1.75%, marking the biggest rise in rates since 1995.
In the same announcement, the BOE also projected that the UK would fall into a recession in the fourth quarter of the year, which is expected to last for five quarters. It comes as the Bank revealed its baseline forecast is for GDP to fall by 1.25% in 2023 and 0.25% in 2024.
