Following Thursday's Bank of England rate hike:

• ForexLive European FX news wrap: BOE delivers 25 bps rate hike as expected
• BOE's Bailey: Inflation remains too high
• BOE's Bailey: Past rate hikes will weigh more on the economy in the coming quarters

Bloomberg TV (gated) interviewed a former Bank of England Monetary Policy Committee (MPC) member Michael Saunders.

• “There’s a strong likelihood that inflation will undershoot the Bank of England’s forecast by quite a large margin in April,”
• “Interest rates may well have peaked. If they go up, it’s only one further hike. But I’d say this big tightening cycle since late 2021 is now probably over.”
• “Given the drop in energy prices which is going to feed through and the weakness in the survey guide to firms’ pricing, I think it’s more likely that inflation in this quarter will be close to 7%”
• “That’s really quite a big undershoot. If it comes out like that, it would be the biggest undershoot in 20 years. If that comes through I think the likelihood is that interest rates will not be going up again.”

Saunders made a name for himself on the MPC as a hawk's hawk. This makes such remarks notable indeed.

This article was written by Eamonn Sheridan at www.forexlive.com.

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