The Bank of England may have to push interest rates as high as 7% and trigger a “hard landing” for the UK economy, a prominent economist has warned.
A hard landing for the economy "looks increasingly likely", said JPMorgan economist Allan Monks on Wednesday.
While his baseline forecast is that the base rate will peak at 5.75% he said there is a risk that rate hikes all the way to 7% will be needed if elevated wage growth continues to offset impact of rising mortgage rates.
Last month, the Bank's monetary policy committee (MPC) hiked the base rate to 5.0% as it tried to stem persistently high levels of inflation.
Since then the average rate for a two-year mortgage fix has almost reached 6.5% and a five-year fix has passed the 6% mark.