BOE's Bailey: Interest rates are not going back to pre-GFC levels

• We don't know what normal interest rates will be in the future
• We are going to be dealing with high inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term for some time
• Does not think selling QE assets will have big impact on market rates

After presenting a dire forecast of the economy yesterday and noting that policy is "not on a pre-set path", it is increasingly clear that the BOE will have to consider more seriously the risks on the other side of the coin. Most punters are now expecting the bank rate to reach 2.50% by year-end before the BOE pauses and are looking for rate cuts in 2H 2023.

Citi is expecting two 25 bps rate hikes in September and November before the BOE delivers rate cuts in August next year. Meanwhile, Oxford Economics sees the bank rate rising by another 75 bps by November before the central bank reverses that same amount in 2023. Danske Bank is expecting a 50 bps rate hike in September and 25 bps in November before the BOE calls it quits in the tightening cycle. (h/t @Adamlinton1)