The Bank of England raised its policy rate by 25 basis points to 4.25%. Economists at Rabobank belive that Bank rate could rise as high as 4.75% and forecast the next 25 bps hike in May.

Another 25 bps hike for the May meeting

“The BoE raised its policy rate by 25 bps to 4.25%. The vote was split 7-2-0, with external members Tenreyro and Dhingra voting for a hold.” 

“It will tighten policy further in May if price pressures persist and credit conditions permit. The shift to a meeting-by-meeting approach is not as dovish as some expected.”

“The Financial Policy Committee has judged that the UK banking system remains resilient, effectively giving the green light to this rate increase.”  

“For now, we hold on to our long-held view that Bank rate could rise as high as 4.75% with the next 25 bps hike in May. This requires that global financial stability risks remain contained.”