BOE to ramp up rate hikes amid the UK’s worst cost-of-living crisis – Reuters poll

According to the latest Reuters poll, the Bank of England (BOE) is predicted to embark upon an aggressive tightening cycle than previously expected, despite the UK economy battling the worst cost-of-living crisis in three decades.

Key findings

“Asked when the cost-of-living crisis would peak, seven of 13 respondents to an additional question in the May 12-17 poll said the fourth quarter. Three said next quarter and three said by the end of next month.”

“Participants in the poll saw little let up with inflation averaging 8.3% next quarter from 8.7 in the current one, an increase from the 7.9% and 8.4% in April’s survey.”

“Medians in the poll showed it rising again to 1.25% in June and to 1.50% next quarter before a pause ahead of an increase to 1.75% in the second quarter of 2023.”

“Fifteen saw it below 1.50%, 22 saw it at that level while 19 expected it to be higher - with the top forecasts at 2.25%.”

“The economy will grow 3.7% on average during 2022 and then expand 1.3% next year, median forecasts of nearly 70 economists showed, down from the 3.8% and 1.7% given last month.”