Agency: UK growth a headache for BOE

T. Rowe Price chief European economist Tomasz Wieladek said in a report that faster economic growth in the UK could mean further monetary tightening by the Bank of England in the future.

The economy grew by a better-than-expected 0.5% in June, driven by a surge in manufacturing output.

Wieladek said this suggested that the Bank of England’s attempts to rein in high inflation by raising interest rates to curb demand were not working as expected.

Perhaps the Bank of England has not tightened enough, or there has been a noticeable lag in policy effects, he said.

Even if next week’s inflation data is better than expected, the Bank of England may need to raise interest rates again.