Deutsche Bank: Rising inflation or ending discussions about interest rate cuts by the Bank of England in the future

Sanjay Raja of Deutsche Bank said in a report that, given the soaring energy prices, it seems unlikely that the UK will return to the Bank of England's 2% inflation target anytime soon. Raja said, "The rise in inflation will dispel any talk of rate cuts this year. And the risk of the Bank of England reversing its policy direction and raising interest rates cannot be ignored." He said that fuel prices have already risen by nearly 7% in March, and similar increases are possible in April. The possibility of inflation spreading to other parts of the consumer price index basket is increasing, with fertilizer prices rising, transportation costs soaring, and the prospects of second-round effects cannot be ignored. He said that inflation is likely to peak around 3.5% later this year.