Bank of England More Hesitant on Rate Hikes Amid UK Economic Slowdown, Berenberg Says

According to Berenberg analysts, the Bank of England appears more reluctant to raise interest rates compared to the European Central Bank, citing a weaker labor market and diminished inflation pressure from services. The UK's monetary policy was already tighter before the energy shock, and fiscal conditions remain strained.

The bank forecasts economic stagnation through the summer of 2026, with zero percent quarter-on-quarter GDP growth expected in Q2 and Q3, as the economy slows following strong early-year performance.

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