BoE will raise Bank Rate to 1.25, investors think
Some economists see chance of a bigger increase
Sunak39;s latest costofliving support lowers recession risk
Markets betting on Bank Rate at 3.0 by March 2023

LONDON, June 10 Reuters The Bank of England looks set to raise interest rates next week for the fifth time since December, its steepest run of rate hikes in 25 years, and is likely to keep going in the coming months as inflation heads for double digits.

While Britain is forecast to have the weakest economy in 2023 among the world39;s big, rich nations, investors and most economists are predicting a quarterpoint rate hike by the BoE next Thursday.

That would take Bank Rate to 1.25, its highest level since January 2009, when Britain39;s economy was holed by the global financial crisis.

While historically low, expectations for British borrowing costs over the next couple of years have risen sharply recently and they jumped again this week when the European Central Bank flagged rate hikes at its next two meetings, including a possible half percentagepoint rise in September.

Investors are betting on the BoE39;s Monetary Policy Committee doubling Bank Rate to 2 by September and hitting 3 by March next year. Some economists are ramping up their forecasts too.

Sanjay Raja at Deutsche Bank said on Friday he now expected rates to peak at 2.5, up from a previous call of 1.75, starting with a 0.25 increase next week.

We don39;t expect a unanimous decision, however….