While it is possible that the monetary policy committee might want to slow the hiking to a quarterly pace after the May meeting, we remain skeptical that this will be feasible amid ongoing inflationary pressures.

We therefore expect the monetary policy committee to continue to hike in 25 basis point steps until reaching a terminal rate of 5% in August.

We expect that the Bank will only start to reduce rates from 2024 Q2 given resilient growth momentum.

UK inflation on track to fall rapidly, helped by cooling global energy prices (but) was unlikely to drop enough to meet the BoE’s 2% target.