1124 GMT - Investors expect Bank of England interest rates to rise too much, Capital Economics economists say in a note. While energy prices will drive inflation higher in the coming months, a fall in inflation next year will pave the way for faster GDP growth in 2028 and lower interest rates than widely expected, they say. While inflation is now set to rise to 4.3% early next year, from 3.1% in August, that burst of inflation won't trigger the second-round inflation effects needed to generate a long period of high domestic inflation, the economists say. They forecast two 25-basis point rate hikes to reach 4.25%, rather than the range of 4.75% to 5.0% expected by investors in 2027 and 2028.
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