UK: The recent Bank of England Inflation Report suggests a gradual hiking cycle ahead

The UK has delivered a remarkable cyclical upswing over the past year; with GDP growing at an average pace of over 3% annualised growth for 5 quarters in a row. This has been the result of extraordinary policy support both on the monetary side (low base rate policy and quantitative easing) and fiscal policy (smaller fiscal drag, Help to Buy scheme), which together with fading risks surrounding the Eurozone, provided a powerful boost to confidence, which helped to kick-start the economy.