Markets are betting that the Bank of England will be forced to more than double interest rates by next May as it continues to battle with the highest levels of inflation seen in over 40 years.
Traders in the Overnight Index Swap market, which sets prices based on expectations of future official interest rates, are expecting rates to rise to 2.75% by the Bank of England's November meeting, before reaching 4% in summer 2023. Interest rates of 4% are more than one percentage point higher than what was expected earlier this month and more than doubles today's interest rate figure of 1.75%. The central bank is then expected to cut rates close to 3.8% by the end of next year, amid expectations of fading inflationary pressures and a long recession. The Bank of England raised ...
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