The further escalation of the war in Ukraine this week, which resulted in tighter economic sanctions on Russia and renewed surges in commodity prices, has increased the upside risks to inflation and the downside risks to activity. That’s a tricky mix for the Bank of England to juggle. As it stands at the moment, we still expect the Bank to raise interest rates to 1.25% this year and to 2.00% next year. But the risks to that forecast are shifting to the downside.
Drop-In (8 March, 10:00 EST/15:00 GMT): We’re discussing Russian energy imports and Europe’s energy needs in this special 20-minute briefing on one of the big sticking points in the western response to the war in Ukraine. Register here.
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