Citi predicts two more BoE rate hikes after inflation data surprise

U.S. bank Citi said on Wednesday it now expected two further Bank of England interest rate hikes, rather than the one it had previously forecast, and no rate cut in November after inflation data came in higher than expected.

“The headline data is ugly,” Citi economist Benjamin Nabarro said in a note to clients.

“But while the headlines here are more hawkish than we feared, the details are a little more dovish, with services in particular not delivering the scale of acceleration we had feared… With cost pressures now showing signs of easing, we continue to expect sharp cuts through 2024.”