Economists expect the Bank of England to raise the rate again in February to slow the growth of inflation in the country, which reached a nearly 30-year high in December and is well above the 2% target. In general, economists revised their forecasts for inflation for the 1st and 2nd quarters of 2022 to 5.2% and 5.5% from 4.7% and 4.6%, respectively. As for the Bank of England's rate hike in February, market participants estimate an approximately 85% probability of such a move.
Most economists (65%) expect the Bank of England to raise the rate to 0.5% from 0.25% at its February meeting, while about 75% of economists predict an increase in the rate at the March meeting.
Meanwhile, economists expect UK GDP growth to slow to 0.6% in the 1st quarter, but then accelerate to 0.9% in the 2nd quarter. In addition, the economy is projected to grow by 4.5% in 2022 and by 2.2% in 2023.
As for the impact of the Omicron strain on the British economy, economists have almost unanimously stated that it will be milder or much milder compared to the Delta strain.