Money managers expect to see U.K. interest rates reach a peak in the coming months, following a 12th consecutive raise by the Bank of England on Thursday.
Managers were not surprised by the central bank's decision to raise rates by 25 basis points, to 4.5%, and said that while the bank was not forecasting a recession, the inflation forecast meant the bank won't be able to pause future hikes just yet.
Andy Burgess, fixed income investment specialist at Insight Investment, said in an emailed comment that the core inflation expectation has moved to the upside due to developments in the housing market.
"However, given the tightening already seen, we are not far from the peak in rates with only one or two rate hikes likely from here. We then expect the Bank of England to pause, in contrast to market expectations for rate cuts in the second half of the year," he said.