BoE does not rule out further rate increases should inflation data continue to be unfavorable – Commerzbank

The Bank of England raised Bank Rate by 50 basis points to 5.00% today. The BoE will continue to monitor the development of inflation and raise key rates further if necessary, economists at Commerzbank report.

Further tightening might be necessary

Following the latest surprisingly strong inflation data, the BoE decided to take a major rate step and raised Bank Rate by 50 bps to 5.00%, the highest level since September 2008.

Whether the BoE has now reached the peak is not certain and depends heavily on inflation weakening as expected in the coming months.