If this happens mortgages could rise in the Spring
Quote:
Britain’s Inflation Spiral Seen Pushing Interest Rates to 4%
British households might have to cope with interest rates hitting 4% as soon as next spring as policymakers wrestle with out-of-control inflation.
That’s the view coming from money markets, where traders are ramping up bets on more aggressive tightening by the Bank of England. With the gas crisis worsening and winter just months away, there’s a sense that officials will have to send the economy into a deep recession to rein in inflation running at the fastest pace in 40 years.
The rapid repricing comes as traders bet consumer costs will keep rising at a record pace, with Citigroup Inc. saying the headline rate will climb above 18% next year. The market is wagering the BOE will even leapfrog the Federal Reserve in raising rates, which has so far taken a more aggressive approach to fighting inflation.
The BOE has hiked at six consecutive meetings and opted for a larger half-point hike most recently, its largest in over two decades.
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