abrdn: Risk of inflation peaking higher than BoE's forecast of 13%

abrdn: Risk of inflation peaking higher than BoE's forecast of 13%

August 17, 2022

Inflation UK
Inflatie (05) rente

This is a commentary by Luke Bartholomew, Senior Economist dat abrdn, on the UK inflation figure announced this morning.

UK inflation continues to surge higher, coming in stronger than forecast once again, increasing the risk that it will ultimately peak even higher than the 13% figure forecast by the Bank of England. Every upwards inflation surprise tightens the bind the BoE finds itself in, with mounting inflation pressure combined with growing recessionary headwinds. Given the strength of underlying inflation pressure we continue to expect the Bank to deliver another 0.5% interest rate increase at its next meeting.

With monetary policy having to tighten even in the face of bad economic news, investors continue to have little in the way of a safety net from central banks, which is likely to keep markets volatile.

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