Interest rates: Bank of England may raise base rate ‘higher’ despite inflation fall | Personal Finance | Finance

Under previous forecasts from the Bank of England, the UK has been expected to fall into a recession later this year.

However, with the latest gross domestic product (GDP) figures suggesting signs of growth in the economy, the depth to how long any potential recession will be may be reviewed.

Despite this, Mr Pugh believes a “shallower recession” than expected may result in the central bank raising the base rate even further.

The economist added: “However, falling inflation doesn’t mean the end of interest rate hikes. Core inflation, which excludes volatile food and energy prices, is coming down much more slowly, and the labour market remains extremely tight.