“The Bank of England (BOE) will raise interest rates faster than previously thought to tame surging inflation,” per the latest survey of economists by Reuters. The surveyed also “significantly upgraded their forecasts for consumer price rises,” said the poll.

Key findings

Nearly two-thirds of respondents in the Feb. 7-11 poll, or 25 of 40, expected a 25 basis points increase in Bank Rate to 0.75% at the conclusion of the next MPC meeting on March 17. That would mark the first time the Bank has raised rates at three meetings in a row since 1997.

A slim majority, 21 of 41, forecast a further increase to 1.00% next quarter. That is well behind financial markets, which are pricing in the bank to make a cumulative 75 basis points of increases at its March and May meetings.

In a poll taken last month, only one further increase was expected this year - in the third quarter - showing how quickly rate expectations are changing.

More than 80% of respondents to an extra question, 15 of 18, said it was more likely the BoE increases rates more than they expect rather than less.

Amidst calls from BoE officials for wage restraint 85% of respondents, 17 of 20, did not see pay rises keeping up with inflation over the next 12 months.

Also read: GBP/USD bulls take the lead at the start of the week