Raising interest rates to 5.25% next year would knock nearly 5%, or £114bn, off the economy, the deputy governor of the Bank of England has warned.
Markets had anticipated UK interest rates would peak at that level before Ben Broadbent’s speech yesterday. Rates currently stand at 2.25% but are expected to rise to tame inflation.
But the rate-setter said interest rates may not rise as high as investors are predicting.
