UK rates up to 5.25% – “the risks to inflation now appear more to the upside”

The Bank of England has just hiked to 5.25%. Their statement is here. The Bank expects inflation to rise further in the near term, with limited spare capacity in the economy. However they do expect the impact of falling oil and the stronger pound to lead to inflation falling back in the medium term. The risks however are “more to the upside”. We think the Bank still has more to do.

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