There is a good chance that CPI inflation has peaked or will peak before the end of the year. There are even some signs that inflation is becoming less persistent. This may contribute to the Bank of England slowing the pace of rate hikes from 75 basis points in November to 50 basis points in December. But we think the Bank will need more concrete evidence of inflation becoming less persistent before it stops raising rates. Our forecast is that rates will rise from 3.00% now to a peak of 4.50%.
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