The Bank of England (BoE) will likely raise interest rates by a further 25 basis point (bps) in June as more monetary policy tightening may be needed to tame underlying sticky inflation, J.P. Morgan said in a note on Friday.

Strong business activity and consumer confidence data last week challenged the central bank’s signaling that inflation may have turned a corner, which had prompted investors to prepare for the end of its run of higher borrowing costs.

“…Data indicates that a broader behavioral shift is also underway.

This is would likely add further pressure to an already tight labour market, likely requiring further policy tightening,“ said J.P. Morgan economist Allan Monks in a note dated Feb. 24.

The 25 bps hike, following similar sized moves in March and May, will take the BoE terminal rate to 4.75%, Monks said, but said the odds of a 50 bps hike in March are low.

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Money markets, which had started pricing in a higher terminal rate last week following the data, currently expect a peak rate of 4.73% by September.

“We now anticipate the BoE will have to make significant changes to its growth, labour market and inflation forecasts,” Monks said.