Deutsche Bank expects 50-bps Bank of England August rate hike

LONDON (Reuters) – Deutsche Bank (ETR:) said on Tuesday it now expects the Bank of England to raise interest rates by half a percentage point at its August meeting.

Data released earlier in the day showed a key measure of British wages rose at the joint fastest pace on record.

“For now, evidence of still more persistent wage pressures will keep the MPC’s foot on the accelerator,” Deutsche said in a note, referring to the BoE’s rate setting body.

“A second consecutive 50-bp hike now looks more likely than

not. Accordingly, we change our call for August, and now expect a 50-bp hike at the next BoE meeting, taking (the) Bank Rate to 5.5%.”

Deutsche analysts said they were keeping their terminal rate projection fixed at 5.75%.

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