NIESR warns Bank Rate may need to reach 5% in 2027 to tame inflation

Created Nov 11, 2026 • AI-generated summary

NIESR's latest Economic Outlook (reported 11 November 2026) warns the Bank of England may need to raise Bank Rate to around 5% in 2027 to bring inflation under control, forecasting inflation of 4.4% in February 2027 driven by energy prices feeding into wages and domestic costs. NIESR argues a quarter-point rise to 4.25% would leave inflation above the 2% target until late 2030, while rates near 5% could return it to target ~18 months sooner; tighter policy would leave GDP ~0.4pp lower in 2028 and 2029, with growth slowing to 1.1% in 2027 and 0.9% in 2028. Includes comments from NIESR director David Aikman and warnings on mortgage affordability, transactions and development viability. Membership limited to coverage of this specific NIESR Economic Outlook forecast.