James Smith, ING’s advanced markets economist, emphasized that the higher than expected March inflation figure in the UK and the high growth in wages may lead policy makers to head towards an interest rate hike in May.
Stating that inflation for services is stabilizing even though the core inflation rate is very high, Smith emphasized that the rise in goods prices being more stubborn than expected strengthens the possibility of an interest rate hike.
“The markets have fully priced in the rate hike in May for now. Until now, we expected rates to remain unchanged, but now it is more likely to increase rates than not,” Smith said. said.