Analysts at TDS believe that the next rate hike from the BoE will occur in May 2018, after the UK and the EU27 have struck a transitional agreement.
“Beyond that, the MPC is likely to continue on a very slow hike path, pausing for one year as Brexit negotiations hit the home stretch. We expect two hikes in 2019. Our forecast is conditioned on continued slow pass-through from the weaker currency to inflation, lower trend supply growth amid decent demand growth, a labor market operating near capacity resulting in wage gains, and a transitional Brexit deal agreed in Q1 that helps lift some uncertainty on households and firms.”
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