BOE Models Point to Risk of Inflation Undershoot, Barclays Says

UK inflation could undershoot its 2% target if the Bank of England raised interest rates as much as financial markets currently expect, according to Barclays Plc analysis based on forecasting assumptions used by the central bank.

Money markets are now betting on three quarter-point hikes this year in response to increased energy prices triggered by the Middle East conflict, prompting several BOE officials to play down the threat of an inflationary spiral.