And the bank’s analyst, George Saravelos, said in a research note that the British Central Bank should raise interest rates by a significant rate as soon as possible during the next week, in order to be able to restore its credibility with the market.
The yield on British government bonds rose by the largest daily pace in more than three decades, Friday, and the pound witnessed a decline of about 3 percent after the British government announced details of a new plan aimed at reducing taxes.
Saravelos added that the BoE’s decision to cancel plans to sell government bonds may make matters worse, explaining that the strong signal from the British Bank that it is ready to do everything possible to quickly reduce inflation and make real returns positive, will help the country’s economy.
The Bank of England raised the interest rate last week by 50 basis points, to 2.25 percent.
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