- Higher than expected inflation could mean further rate hikes ahead
- Economists think BoE must drive down demand to bring inflation back to target
Disappointing inflation figures could see the Bank of England (BoE) increase interest rates enough to trigger a UK recession, economists have warned.
Analysts at Capital Economics said that high core inflation could see the BoE hike rates from 4.5 per cent to a peak of 5.25 per cent later in the summer, making a recession at some point more likely. However, they suggest the "recent resilience" of the economy meant it would happen "a bit later than anticipated”.