Analyst: The Bank of England should be more hesitant than the European Central Bank to raise interest rates.

Berenberg analysts stated in a report that it seems reasonable that the Bank of England is less willing to raise interest rates compared to central banks in other European countries. They mentioned that the labor market in the UK is weaker than in the Eurozone, and the service industry is no longer significantly driving inflation as it used to. The analysts at Berenberg also noted that before the energy shock, interest rates were more restrictive, and the fiscal situation remains tighter. They added that after a strong start to the year, economic activity in the country is now facing a slowdown due to the dragging effects of the Iran war. They also pointed out that due to a change in seasonal spending patterns since the pandemic, the first quarter seems weaker than it actually is. The analysts at Berenberg commented, "We expect stagnation in the summer, with zero GDP growth rates in the second and third quarters."