The rise in energy prices poses a fresh dilemma for the Bank of England, but we still don’t think the bar for a rate hike has been met. We’re expecting another 7-2 vote to keep rates on hold this Thursday. The Bank’s updated forecasts are likely to show inflation fairly close to 3% in the second half of this year and into early next. And crucially, that’s well below the 4% threshold that the Bank has previously argued is statistically more likely to trigger second-round effects and a longer-lasting bout of price pressure. That doesn’t necessarily mean much; those new forecasts almost certainly won’t fully account for ... (full story)