This is the last rate of the City on the day when inflation peaked at 40% for the year, jumping from 7% to 9% for the year to April.
There may be more rate increases than this. “In our view, the risks to our bank rate are distorted,” the note said.
He added: “This rate profile, we believe, will mean a weak economy. We forecast growth of just 0.4% in 2023, the weakest in the consensus panel and close to -0.25% of the Bank of England. But weak growth, in our view, will be needed to try to keep expectations. Unfortunately, we believe that the risks are leaning towards an even weaker economy, which is now needed to return inflation to target.
Meanwhile, Allianz Trade said that the insolvency of enterprises this year will increase by 37%.
Maxim Lemerle, head of insolvency research at Allianz Trade, said: “Our forecasts paint a difficult picture for British business, despite the resilience shown in recent years. In a sense, this year’s increase in insolvency is inevitable after broad state support since March 2020, but it also highlights some of the macro-challenges facing the economy. “
Some in the city now say the blow to the economy is so severe that inflation has, in fact, peaked. By the end of 2023, it may return to the Bank of England’s 2% target.
Today, ING said: “Although there are many risks of rising inflation in the UK, we suspect that the 9% figure in April will peak. Some product categories will begin to lower the headline rate, even if further pressure on food and services is still ahead. The main thing for the Bank of England is that by the end of 2023, inflation is likely to be lower than planned.
There are growing calls for more state aid for the most vulnerable.
Ctizens Advice said “warning lights can’t flash brighter.”