Bank of England Deputy Governor Ben Broadbent said it’s not clear that UK interest rates need to rise as much as markets are betting at the moment.

Investors are currently pricing in rates rising to 5% in early 2023, up from as 2.25%.

While “the justification for tighter policy is clear” in the face of soaring inflation, demand will slow to some extent anyway, as a result of higher prices, Broadbent said in the text of a speech on Thursday. “Whether official interest rates have to rise by quite as much as currently priced in financial markets remains to be seen.”

The pound declined after the speech, trading down 0.2% at $1.1190, while gilts trimmed a decline.

“If bank rate really were to reach 5%, given reasonable policy multipliers, the cumulative impact on GDP of the entire hiking cycle would be just under 5% — of which only around one quarter has already come through,” Broadbent said.

If government support offsets the hits to comes, policy will have to do more “at the margin” Broadbent said. The BOE will incorporate the government’s Oct. 31 fiscal plan — which will see a removal of stimulus relative to what was expected in September — into its November forecast round.

“The MPC is likely to respond relatively promptly to news about fiscal policy,” he said.