On Thursday, the Bank of England (BoE) announced a 25 basis points rate hike, bringing the bank rate to 4.50%. This decision was in line with expectations. Analysts at Danske Bank predict another hike in June, projecting the bank rate to reach its peak at 4.75%.

Key quotes: 

“With both the global backdrop, inflation and wage growth having surprised to the topside, we do not believe that data will have weakened enough for the BoE to pause its hiking cycle at the June meeting.”

“We thus revise our forecast to include a 25bp hike in June, marking a peak in the Bank Rate at 4.75%. Likewise, we believe that upcoming data releases have to prove worse than expected for a pause to be warranted considering the forecasts presented in the Monetary Policy Report (MPR).”