Deutsche Bank said it anticipates the Bank of England (BoE) to raise interest rates by 0.5% in its upcoming August meeting.
Earlier today figures revealed that average earnings growth, excluding bonuses, stood at 7.3% month-on-month.
“Given the evidence of more persistent wage pressures, we expect the Monetary Policy Committee (MPC) to continue with a proactive stance,” the Deutsche Bank note read, referencing the BoE’s rate-setting body.
“In light of this, a second consecutive 50 basis-point increase appears more probable. As such, we are adjusting our prediction for the August meeting and now foresee a 50 basis-point hike. This would raise the Bank Rate to 5.5%.”
This comment marks a change in Deutsche’s previous stance, reflecting growing concerns over the speed at which inflation is increasing in the UK economy.
