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The Guardian - UK
The Guardian - UK
Business
Richard Partington Economics correspondent

Stubborn UK inflation may lead to 7% interest rates, economists warn

A view of the Bank of England as seen from Threadneedle Walk, in City of London
JP Morgan’s central forecast is for the base rate to peak at 5.75%, but it warns rates could go higher under some scenarios. Photograph: Thomas Krych/Zuma Press Wire/Shutterstock

The Bank of England may need to push interest rates to as high as 7% to tackle stubbornly high inflation, economists have warned, amid fears the soaring cost of borrowing could drive the economy into recession.

With households under growing pressure from rising mortgage costs, the US investment bank JP Morgan said there was a risk that persistent inflationary pressures could lead the central bank to raise interest rates by more than expected.

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