Inflation Makes Rate Hike A Possibility

September 2008 | Market Strategy

We have raised our year-end interest rate forecast to 4.25% on the back of a higher than expected inflation reading in August. We now see the headline interest rate remaining at its current level of 4.25% by year-end. There is some possibility that the Bank of Israel (BoI) could hike to 4.25% before cutting again by the end of the year, but our core scenario is for rates to remain on hold.

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