UK interest rates will peak well below the level financial markets expect, according to UBS.
The Swiss bank's wealth management arm expects the Bank of England to raise rates only twice, taking Bank Rate to a peak of 4.25%.
It forecasts a quarter-point rise this week, followed by one more in February.
Maelle Quillevere, an economist at UBS, said this should not be mistaken for the start of an aggressive run of rate rises.
She said there was little evidence so far of second-round effects, where higher prices feed through into wages and other costs.
That suggests the jump in inflation caused by higher energy prices may not become entrenched.
UBS acknowledged a clear risk that more rises would be needed, but said its expected peak remained well below current market pricing.
The Bank has held rates steady in recent months while it weighed rising inflation against the risk of slower growth.
Quillevere said the economy had proved remarkably resilient, which had weakened the case for waiting.
UBS also warned that last week's Budget had pushed difficult decisions on tax and spending into the run-up to the next election.
The Budget increases borrowing at first, with spending restraint and tax rises not due to start until 2029.
The next general election must be called by August 2029.
UBS said it was hard to see a government imposing spending cuts or tax rises as a campaign approached, raising questions about whether the plans were credible.
Chancellor John Healey offered some help to households and businesses facing higher costs, while raising a few taxes.
The government's fiscal headroom, the buffer it has against breaking its own borrowing rules, fell to £15 billion from £24 billion.
UBS said the cut was largely expected, and markets barely moved.
The muted reaction in gilts, UK government bonds, showed investors were willing to give the government time.
But the bank said the lack of any fall in the extra return investors demand to hold UK debt showed that credibility still had to be earned.
