The ECB's 50 Basis Point Increase Is a Response to the UK Inflation Story

There is a perception out there that the UK inflationary problem is quite a bit worse than in other developed markets. We do see inflation coming down in our forecast, and as the Bank of England keeps raising rates,. That should help re-establish some credibility in our view. Having said that, though, what we're finding here is that the impact of rate rises only has a very slow burn impact on inflation. So it might actually take quite a long time for inflation to come back down.