Bank of England readies another rate hike even as recession hits - SABC News - Breaking news, special reports, world, business, sport coverage of all South African current events. Africa's news leader.

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A ninth interest rate hike in a row by the Bank of England looks to be a foregone conclusion on Thursday and investors will be looking for clues on how many more will be needed with the economy sliding into recession but inflation still above 10%.

The Monetary Policy Committee has faced both encouraging and worrying news on the economy since a majority voted in early November to raise rates by 0.75 percentage point, the biggest hike since 1989.

Britain’s economy looks set to be the weakest performer among Group of Seven nations in 2023, according to the Organisation for Economic Co-operation and Development. Investors mostly agree although financial markets put a roughly 25% chance of another 0.75 percentage point hike. The BoE’s newest rate-setter Swati Dhingra said earlier this month that higher interest rates could lead to a deeper and longer recession, adding there were few signs that demands for higher wages risked setting off a wage-price spiral.

“As monetary policy works with a lag, we still do not know the full effects of the BoE’s tightening measures so far,” said Kallum Pickering, an economist at Berenberg Bank. The annual rate of consumer price inflation dropped to 10.7% in November from 11.1% in October, a lower rate than the BoE had pencilled in last month.

 

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South African inflation is at 7.4% outside the target range of 3-6%...rates hikes are about to reach its peak!

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