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HERE will be at least four more rate hikes this year, and the surge in inflation-driven defaults taking a toll on the increasingly shaky UK economy.

It was the City’s latest bet on the day inflation surged to a peak of 40% on the year, jumping from 7% to 9% in the year to April.

In response, Bank of America told customers that interest rates would double from 1%. The Bank of England will now raise interest rates by 0.25 percentage points in June, August, September and November.

There could be more bull runs than that. “In our view, the risk to our Bank Rate call is growing,” it said in a note.

It added: “This rate profile, we think, will mean a weak economy. We forecast growth of just 0.4% in 2023, the lowest in the consensus panel and not far from the -0.25% BoE. However, in our view, weak growth will be necessary to try to maintain expectations. Unfortunately, we think the risks are tilted towards an even weaker economy which is currently needed to bring inflation back on target.”

Meanwhile, Allianz Trade said business defaults will grow 37% this year.

Maxime Lemerle, head of insolvency research at Allianz Trade, said: “Our forecasts paint a difficult picture for UK businesses, despite the viability resilience has been demonstrated in recent years. In a sense, the default rate predicted to rise this year is inevitable after widespread government support since March 2020, but it also sheds some light on some of the broader challenges facing the country. size that the economy is facing. ”

Some in the City now say the economic impact has been so severe that inflation has in fact peaked. It could fall back to the Bank of England’s 2% target by the end of 2023.

ING today said: “While there are upside risks to UK inflation, we think April’s 9% figure will mark the highest level. Some commodity categories will begin to drop headline rates, even if further pressure in food and services is yet to come. It is important for the Bank of England that inflation is likely to be below target by the end of 2023.”

There are growing calls for the government to help the most vulnerable in society.

The netizen’s advice said “the warning light can’t be blinking any brighter”.

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